Feeding the Blue Beast

[RightField]

This is one of the most prescient articles I've read. It's by Walter Russell Mead at The American Interest (an organization that I'm not familiar with). He didn't mention the trial lawyers organization which is a charter member of the "Blue Beast." What do you think of this?

Posted on February 12th, 2010
Feeding the Blue Beast

The driving force in American politics today is a struggle to restructure and modernize some of our most basic institutions. It’s only going to get more intense.

Back before the global warming mess blew up, I wrote a post about the breakup of the ‘blue social model‘. Not to regurgitate the whole post, but the mid-twentieth century saw the US (like most advanced countries at the time) develop an economic and political system based on large and stable entities in the public, private and mixed sectors of the economy.

The private sector was dominated by large, regulated and mostly unionized oligopolies and monopolies like the Big Three automakers and the AT&T telephone monopoly. Government had a large and growing civil service protected cadre of professionals and bureaucrats and provided ever-increasing public services. The public schools and the universities were also built on the blue model: they provided lifetime employment to those who worked for them and were expected to provide more and better services each year. College education was expected to become more and more affordable for more and more people, with government subsidies making up the difference. Politics was a process of negotiation between large, organized interest groups: the Big Three automakers and the UAW hammered out the division of the industry’s revenues at the bargaining table, but also negotiated through the political process to enhance the position of the industry as a whole and to shape government policy to the marginal benefit of either the unions or the companies.

The blue social model was a triumph of progressive social imagination and political organizing; for two generations it effectively reconciled capitalism with the demand for a better living standard and more security for the population at large.

The breakdown of the blue model is the core problem of American society today and the key to the troubles of the Democratic party. Blue states really are blue; the ‘progressive imagination’ remains staunchly blue, and blue model interest groups like public school teachers, government employees, the remnants of the private union movement and the much healthier labor movement among public employees shape and mostly fund what Howard Dean famously called ‘the Democratic wing of the Democratic Party.’

Most Americans would like the blue model to stick around and are nostalgic for the security it once provided, but they understand that the great task of our times isn’t to save the blue model but to move on. The Democratic wing of the Democratic Party believes exactly the opposite: that the blue social model is the only way to go. If our city and state governments are groaning under the dead weight of inflated labor and pension costs, the only solution is to pump federal money into them somehow. If public schools aren’t working, they need more money — but seriously restructuring the system is out of bounds. If college and university tuition is exploding as the costs of education rapidly and continuously outpaces the general level of inflation, the only solution is to pump more money into the system while leaving it to operate much as it does.

Democratic policy is increasingly limited to one goal: feeding the blue beast. The great public-service providing institutions of our society — schools, universities, the health system, and above all government at municipal, state and federal levels — are built blue and think blue. The Democratic wing of the Democratic Party thinks its job is to make them bigger and keep them blue.

Bringing the long green to Big Blue: that’s what it’s all about.
Three problems: we can’t afford it, people know that, and we desperately need the things that Big Blue can’t give us.

Blue institutions aren’t productive enough and efficient enough to provide the services we need. There’s a hard and bitter truth here: workers in these sectors are going to have to accept lower wages and less security going forward — and they will have to produce more than they do now. Much more. This sounds draconian and harsh, but with a relative handful of exceptions everybody else in the United States has been facing this reality for the last generation.

This has turned into a massive political problem for Democrats because more and more people are waking up to the fact that this just doesn’t work. We don’t have the money to keep throwing more and more of it into dysfunctional public schools, overpriced state colleges and government at all levels. In the competitive world we all live in now, our society has no choice but to learn how to do these things much more cheaply. Otherwise the blue sector will drag the whole country down with it. This is part of what drives the Tea Parties: there’s a sense out there that the time for careful, limited reform is past. We need a crowbar, not a scalpel, to fix the blue beast.

Yet Democrats are right about one very important thing. We actually do need (most of) the services that the blue beast seeks to provide. We really do need good government at all three levels. We really do need more and better education. We need better health care and better access to it. The Tea Party movement is more about tearing down the blue beast than about building something that can take its place and until and unless Republicans figure this out the country will shift unhappily between two political parties that it dislikes and mistrusts.

What we really need in this country is a new generation of post-blue wonks who can think intelligently and creatively about how to dismantle the old structures and replace them with something that works. The political party that can figure this out and build a constituency for the massive and, inevitably, sometimes painful and disruptive restructuring this requires owns the future.

Can the Democrats unshackle themselves from their degrading and destructive servitude to the blue beast before the Republicans build a new cohort of smart policy wonks with a practical vision for the future? Can either party develop the capacity for innovative leadership before the social and economic dysfunction of the current system drives us into a massive social and financial crisis?

We will find out the answer to that last question fairly soon, I fear.

 

[RightField]

Of course, the first and largest priority of the new administration was to take our healthcare system and try to swallow it into the blue beast. Was this a wise choice? We hope that its too much for the beast to swallow.

This is a great context for understanding the current political balance.

 

[RightField]

Today's papers have a wealth of great articles. This Blue Beast article is one of the best I've seen.

 

[phrodeau]

Today's papers have a wealth of great articles. This Blue Beast article is one of the best I've seen.

Will you be starting threads about the Olympics too?

 

[RightField]

Will you be starting threads about the Olympics too?

No. The sport of politics is much more interesting. The process is important for all of us and the results have meaning too (beyond a box score).

 

[RightField]

Feeding the blue beast was the highlight of the day.

 

[phrodeau]

So how does this gibe with the ratio of federal funds paid to those collected from the Blue states?

Is this old news, and has the situation reversed? Surely somebody would have noticed it if it had.

http://taxprof.typepad.com/taxprof_blog/2004/09/red_states_feed.html

Red States Feed at Federal Trough, Blue States Supply the Feed
Monday, September 27, 2004

The Tax Foundation has released a fascinating report showing which states benefit from federal tax and spending policies, and which states foot the bill.

The report shows that of the 32 states (and the District of Columbia) that are "winners" -- receiving more in federal spending than they pay in federal taxes -- 76% are Red States that voted for George Bush in 2000. Indeed, 17 of the 20 (85%) states receiving the most federal spending per dollar of federal taxes paid are Red States.

 

[RightField]

So how does this gibe with the ratio of federal funds paid to those collected from the Blue states?

Is this old news, and has the situation reversed? Surely somebody would have noticed it if it had.

http://taxprof.typepad.com/taxprof_blog/2004/09/red_states_feed.html

First, Your quote is from 2004, a long time ago and before the real estate bubble burst and we entered the recession. With the recession and with the current administration, everyone in the country is tightening their belt except the big blue entities which seem to be growing and growing (note the deficit) and many people are getting upset by that. Evidence is the worry about local taxes/property taxes noted in the article.

Second, the philosophical underpinnings of the article are that the "big blue" enterpises have been successful in getting higher rates of pay and overall compensation for their members, but that those "big blue" successes are unsustainable in the face of growing world competition and where all the rest of our economy is shrinking while government grows at quadruple the rate that it grew just two years ago.

 

[RightField]

I thought this passage was particularly apropo:

Blue institutions aren’t productive enough and efficient enough to provide the services we need. There’s a hard and bitter truth here: workers in these sectors are going to have to accept lower wages and less security going forward — and they will have to produce more than they do now. Much more. This sounds draconian and harsh, but with a relative handful of exceptions everybody else in the United States has been facing this reality for the last generation.

Some might argue with the premise that they "aren't productive enough and efficient enough to provide the services we need"...but I agree with the statement. There are lots of great government workers at the local, state and federal level who give their heart and soul to the job, but there are a great number that aren't. The other factor is that often, too much of these government jobs are political in nature and not focued on providing great service at a great price to the American public.

 

[RightField]

This passage from Victor Davis Hanson also points to the problem:

1) Debt and Deficits. At our current rate we will very soon pile up between $18 and $20 trillion in accumulated national debt. We use the euphemism “stimulus”, talk of massive borrowing in terms of percentages of GDP, and casually pontificate about “inflating” our way out of the debt. The fact is that the borrowing is now so massive that there is no way to pay back what we owe without massive cutbacks in accustomed services, and a probable decline in the apparent standard of living. I say “apparent” since many of the essentials that we are accustomed to—everything from sophisticated psychiatric counseling for long-term inmates, frivolous law suits, duplicate and needless medical procedures, to government employee expense accounts, farm subsidies, or grants to the arts and media—are not that essential and will gradually begin to disappear. Raising taxes will be in the short-term offered as a solution, but it won’t for long increase net aggregate revenue since it will eventually discourage economic activity.

And we lack both the patience and guts to cut taxes, and then use the long-term larger revenue stream, coupled with massive spending cuts, to balance the budget. In short, we will invent euphemisms like “stimulus” and “furlough” as the money runs out, and Americans adjust to a lower standard of living. One can already drive in rural central California and see roads that are cracked and full of potholes, random dogs that are not licensed, and thousands of trailer-rentals on blocks and garages-turned-into-rentals, as the government has given up on its old regulation and let large swaths revert to the 1940s and 1950s. I fear that any sixth grader from my 1965 primary school down the road could have read far better than an average contemporary high school graduate of my local community. This decline is not inevitable, given an expanding population, the prior investments of noble generations, continually evolving technology, and spreading globalization, but it is inevitable given the therapeutic culture, and present high-tax, high-spend, redistributive gospel of the present government. No one on either side of the political divide simply says the present borrowing is staggering, unsustainable, and must be paid back by real sacrifice. So we lie on, as if Greece should be our model.

 

[phrodeau]

I thought this passage was particularly apropo:



Some might argue with the premise that they "aren't productive enough and efficient enough to provide the services we need"...but I agree with the statement. There are lots of great government workers at the local, state and federal level who give their heart and soul to the job, but there are a great number that aren't. The other factor is that often, too much of these government jobs are political in nature and not focued on providing great service at a great price to the American public.

Aaand, they would all be Democrats?

 

[RightField]

So how does this gibe with the ratio of federal funds paid to those collected from the Blue states?

Is this old news, and has the situation reversed? Surely somebody would have noticed it if it had.

http://taxprof.typepad.com/taxprof_blog/2004/09/red_states_feed.html

Remember that the "stimulus" of $787 Billion went largely to states (blue states) that were hemoraging money to keep public employee unions from having to lay anyone off. That figure is more than the total cost of the war in Iraq to give you a context, it is a staggering amount of money that is equal to about half the level of total annual government spending from just a few years ago.

Why did the money go to save public employee union jobs when everyone else was losing jobs also? Why not a broad and egalitarian method of reducing costs such as reducing the taxes on business and public employees so all organizatiions could weather the storm more easily instead of just saving the public employees? I don't know if you're aware, but the current administration has quietly passes a bunch of new laws that directly benefit the trial lawyers also, that makes it easier for them to bring suits against businesses so that they can expand their rape of American business also. Why are they getting special treatment instead using the money to benefit the American public as a whole?

 

[RightField]

Less than the Republican/Democrat dialogue, I thought the article was an interesting way to weigh the current situation. It makes it clear who the political interests are in either side and puts a context on the policies being advocated. It was a clearer way of explaining it than I've seen anywhere else. Did it bring clarity to you?

 

[phrodeau]

Remember that the "stimulus" of $787 Billion went largely to states (blue states) that were hemoraging money to keep public employee unions from having to lay anyone off. That figure is more than the total cost of the war in Iraq to give you a context, it is a staggering amount of money that is equal to about half the level of total annual government spending from just a few years ago.

Why did the money go to save public employee union jobs when everyone else was losing jobs also? Why not a broad and egalitarian method of reducing costs such as reducing the taxes on business and public employees so all organizatiions could weather the storm more easily instead of just saving the public employees? I don't know if you're aware, but the current administration has quietly passes a bunch of new laws that directly benefit the trial lawyers also, that makes it easier for them to bring suits against businesses so that they can expand their rape of American business also. Why are they getting special treatment instead using the money to benefit the American public as a whole?

No, I don't remember that the stimulus went mostly to Blue states, although I remember some Republican leaders wanting to refuse their state's money. As I recall, they ended up taking it anyway.

 

[hogjack]

...some Republican leaders wanting to refuse their state's money. As I recall, they ended up taking it anyway.

There's having principles and then..well, there's having principles.

As I recall there was barely a peep when President George W. Bush sat on the veto pen for six years. Pork - and I know pork - was flying then, too.

I peeped [being the only true fiscal conservative on the General Board] but all the great "fiscal conservatives" must have been hiding under their bed studying the Homeland Security color-coded alert system.

 

[RightField]

There's having principles and then..well, there's having principles.

As I recall there was barely a peep when President George W. Bush sat on the veto pen for six years. Pork - and I know pork - was flying then, too.

I peeped [being the only true fiscal conservative on the General Board] but all the great "fiscal conservatives" must have been hiding under their bed studying the Homeland Security color-coded alert system.

Yes, but compared to the deficits now....Bush's was a wart on the butt of an elephant. However, the heart of the article is on the philosophical differences in the parties, what do you think of that.

 

[sigh]

Yes, but compared to the deficits now....Bush's was a wart on the butt of an elephant. However, the heart of the article is on the philosophical differences in the parties, what do you think of that.

I think the six years when Bush and the Republicans controlled everything at the federal level (the White House, both houses of Congress and the Supreme Court) proved that there really isn't a philosophical difference between the core members of the parties. Given the opportunity, the Republicans promptly did everything they bitched about for years that the Democrats had done. Being not as practiced at it, they just didn't do it quite as well.

The core philosophy of both parties is to get elected, get reelected, and do everything possible to keep power, no matter how many of their supposed values get discarded along the way.

 

[RightField]

Most Americans would like the blue model to stick around and are nostalgic for the security it once provided, but they understand that the great task of our times isn’t to save the blue model but to move on.

What do you think of this? I think it's clear that in the world in which we now live, the UAW, for example, can't come out and say that each worker should make an income in Michigan that works out to twice what Toyota pays in Tennessee or Osaka and expect the company to survive.

We can't keep paying local government employees pensions that are 2 and 3 times as bountiful (loose estimate) as what the private sector can afford to pay especially when it was government regulations that forced private companies out of pensions and into 401K plans. When some communities are being forced to consider doubling the rate of property taxes (article I read yesterday) to pay their ongoing expenses plus the large pensions that many of their former employees get, something is out of whack. A recent article pointed out that the large California deficits are caused by two main factors, 1) the drop in tax receipts from the recession and 2) the high pay and pensions of the public union employees (and that they won't concede anything).

I think this article correctly points out that wholesale changes are needed.

 

[RightField]

I think the six years when Bush and the Republicans controlled everything at the federal level (the White House, both houses of Congress and the Supreme Court) proved that there really isn't a philosophical difference between the core members of the parties. Given the opportunity, the Republicans promptly did everything they bitched about for years that the Democrats had done. Being not as practiced at it, they just didn't do it quite as well.

The core philosophy of both parties is to get elected, get reelected, and do everything possible to keep power, no matter how many of their supposed values get discarded along the way.

I agree with you that Bush spent too much. He should have been more circumspect about spending. That doesn't mean that the next Republican President will be so profligate. It also doesn't mean that there's no difference between the parties. The Democrats have quadrupled the annual deficit to levels that genuinely frighten many citizens and economists and plan to have the huge deficits for years to come.

 

[hogjack]

Yes, but compared to the deficits now....Bush's was a wart on the butt of an elephant. ....the philosophical differences in the parties, what do you think of that.

There are philosophical differences between the parties but both - BOTH - major political parties at the national level are about Big Government. They differ on the kinds of Big Government but both are proponents of Big Government. The high-spending, high-taxing Democrats will acknowledge it. The high-spending, big borrowing (don't want to pay for it) Republicans won't acknowledge it.

There are very few politicians of either party - VERY FEW - who are willing, ready and able to make decisions that would really matter as far as the US deficit and spending. There are two reasons for it:

• The American people do not want to really hear the truth and are unwilling to give up what they feel entitled to (yes, gimme mine but yours is wrong) and are even less willing to acknowledge that America is not in the same position it was economically as it was from 1950 through the 1980s
• The largest lobbying entities are as influential as any elected candidate (they are the real kingmakers)

 

[hogjack]

I think the six years when Bush and the Republicans controlled everything at the federal level (the White House, both houses of Congress and the Supreme Court) proved that there really isn't a philosophical difference between the core members of the parties.

Exactly. On the national level Democrats and Republicans are both Big Government proponents who have a differing view on the vision of Big Government.

 

[RightField]

There are philosophical differences between the parties but both - BOTH - major political parties at the national level are about Big Government. They differ on the kinds of Big Government but both are proponents of Big Government. The high-spending, high-taxing Democrats will acknowledge it. The high-spending, big borrowing (don't want to pay for it) Republicans won't acknowledge it.

• The American people do not want to really hear the truth and are unwilling to give up what they feel entitled to (yes, gimme mine but yours is wrong) and are even less willing to acknowledge that America is not in the same position it was economically as it was from 1950 through the 1980s
• The largest lobbying entities are as influential as any elected candidate (they are the real kingmakers)

There are very few politicians of either party - VERY FEW - who are willing, ready and able to make decisions that would really matter as far as the US deficit and spending. There are two reasons for it:

If deficit spending were an elephant, the democrats would be the elephant and the republicans would be the wart on the butt of the elephant. Its a difference of scale and proclivity. The republicans spending is a 1 bedroom apartment and the democrats spending is the Empire State building....they're both buildings, but one is huge and the other is a spec.

Bush had two wars to deal with and kept spending on other programs fairly low with slow growth other than the wars. The new administration has come in and in their first initiative, borrowed as much money as we've used in total for the war for several years and said "Lets give it to unions because they were such a big help to me in getting elected". There's a big difference. A HUGE difference. Luckily, most Americans are recognizing the difference.

 

[RightField]

AJ, how do you like the context that this guy brings (1st post)? Doesn't it make a lot of sense?

 

[RightField]

This passage is pretty good too:

Most Americans would like the blue model to stick around and are nostalgic for the security it once provided, but they understand that the great task of our times isn’t to save the blue model but to move on. The Democratic wing of the Democratic Party believes exactly the opposite: that the blue social model is the only way to go. If our city and state governments are groaning under the dead weight of inflated labor and pension costs, the only solution is to pump federal money into them somehow. If public schools aren’t working, they need more money — but seriously restructuring the system is out of bounds. If college and university tuition is exploding as the costs of education rapidly and continuously outpaces the general level of inflation, the only solution is to pump more money into the system while leaving it to operate much as it does.

 

[RobDownSouth]

This is one of the most prescient articles I've read. It's by Walter Russell Mead at The American Interest (an organization that I'm not familiar with).

If public schools aren’t working, they need more money — but seriously restructuring the system is out of bounds.

He didn't mention the trial lawyers organization which is a charter member of the "Blue Beast." What do you think of this?

The inline quote is a bit curious. Federal funding of education, where I live anyway, is less that 1% of the education budget and is targeted specifically in Title I (severely at-risk students reading programs and mildly mentally retarded), and some school lunch/breakfast programs. Federal funds were supposed to have been available to offset the costs associated with high-stakes testing programs, but the mandate was never funded by Congress.

Personally, I don't see the drawback of having the Feds funding 1% of my school budget, particularly given the targets.