David Brooks writes today about the criticism that President Obama has received this week, from Paul Krugman and countless others, over the tax compromise that he made with the GOP. Brooks defines the President as a ‘Network’ liberal, and his liberal critics as ‘Cluster’ liberals:
“Cluster liberals (like cluster conservatives) view politics as a battle between implacable opponents. As a result, they believe victory is achieved through maximum unity. Psychologically, they tend to value loyalty and solidarity. They tend to angle toward situations in which philosophical lines are clearly drawn and partisan might can be bluntly applied. Network liberals share the same goals and emerge from the same movement. But they tend to believe — the nation being as diverse as it is and the Constitution saying what it does — that politics is a complex jockeying of ideas and interests. They believe progress is achieved by leaders savvy enough to build coalitions. Psychologically, network liberals are comfortable with weak ties; they are comfortable building relationships with people they disagree with. This contrast is not between lefties and moderates. It’s a contrast between different theories of how politics is done. Ted Kennedy was a network liberal, willing to stray from his preferences in negotiation with George W. Bush or John McCain. Most House Democrats, by contrast, are cluster liberals. They come from safe seats, have a poor feel for the wider electorate and work in an institution where politics is a war of all against all.”
Brooks is trapped in the fuzzy center, with the vanishing moderates. His analysis of the political climate today is crystal clear, and he is exactly right, the President did achieve a victory with this tax compromise. The problem with politicians that give no quarter is that the major problems we face demand compromise and cooperation. The President wants to tackle comprehensive tax reform in the Spring; progress on that difficult issue will be hindered by cluster politicians. The main reasons I originally became a supporter of the President, after his 2004 Convention speech, were that I saw a Great Communicator in the mold of Reagan, and a network politician willing to work across the aisle. This is the perfect opportunity for the President to play to his strengths.
With the 2012 election approaching, Paul Krugman is right about one thing: many Republicans will be working to sabotage the President because they think that will deliver the White House to the GOP. The problem with the GOP game plan is that the American people will not stand for two years of stalemate. GOP opposition to the Health Bill for 9/11 workers is the perfect case in point.
David Brooks is a sensible conservative; he writes for the New York Times, which means he gets written off as some sort of centrist by those on the Far Right, but I appreciate the way he approaches the complex issues of our time. Brooks ponders the philosophical meaning of our problems, and strives for well thought analysis instead of trite ideological rants. I always enjoy his columns, even those I disagree with. Today, he argued that criticism of campaign spending is overblown, because money just doesn’t influence elections as much as people assume.
First of all, Brooks points out that based on a few studies, Democrats in competitive races are outspending Republicans. He then examines polling showing Republican advantages in many races, and concludes that the money spent had no effect. Brooks argues that independent group spending is only a 10th of political party spending, and that there is no way to prove that independent spending is more effective than party spending. Finally, he argues that people do not respond to the din of political advertising. Speaking about the Colorado Senate contest between Michael Bennett and Ken Buck, where there have been 5,358 pro-democratic ads and 4,928 pro-Republican ads, Brooks writes that “This isn’t persuasive; it’s mind-numbing. No wonder voters tune it all out. Amid this onslaught, there is no way a slightly richer ad campaign is going to make much difference.”
On his last point, Brooks is both right and wrong. On one hand, people do not respond to marketing like they used to, political marketing included. With the spread of smartphones, even our formerly quiet parks are now forums for messaging. We have ready access to e-mail and other media, at every moment. We are saturated. On the other hand, because of the Supreme Court decision in the Citizens United case, corporations can again open the spigot of campaign spending.
The Center for Responsive Politics, the same group that Brooks quotes, reports that as a result of the Citizens United case, there is record spending by independent groups in this Midterm Election. Unprecedented spending, and despite the Supreme Court insisting that corporations must disclose their political spending, this does not mean that the ad must make that support clear. Instead, innocent sounding fronts called Citizens for a Better America or Minnesota Forward collect the corporate cash and hide its source from the American public. Of course, you hear similar complaints from Republicans over Union spending. Citizens United only served to make the political waters murkier, rather than more transparent. Brooks views the effect of this new spending as insignificant:
“In the end, however, money is a talisman. It makes people feel good because they think it has magical properties. It probably helps in local legislative races where name recognition is low. It probably helps challengers get established. But these days, federal races are oversaturated. Every federal candidate in a close race has plenty of money and the marginal utility of each new dollar is zero. In this day and age, money is almost never the difference between victory and defeat. It’s just the primitive mythology of the political class.”
Brooks is naive here. People should know where the money comes from. Voters should know what special interests the candidates are supported by, and which candidates their businesses support. Voters should be able to use that information to decide whether they want to continue to support that business. Voters should know when businesses write legislation that is blindly adopted by candidates the businesses supported in previous elections. Voters should understand the complexity behind the significant problems we face.
There is one way to level the playing field: federal financing of election spending. That levels the playing field and leaves the ideas and promises of the respective political parties as the only currency. Of course, voter education will be a tough nut to crack. The political system aims for the lowest common denominator; voters are conditioned to listen on that level. We should celebrate citizen involvement in elections, in the day to day grind of political life. Citizens should participate in their Democracy, not only during exciting elections, but every day. It can start at the community level, with citizens more actively engaged in the decisions their elected representatives make on their behalf. In the end, it comes down to participation and engagement.
This is an odd election year, with primaries, run-offs, and special elections appearing on a monthly basis. Today voters in California and Arkansas will make important decisions.
In California, voters will determine the fate of Proposition 14, which would replace the Primary system with a new system that would allow the top two vote getters to face off in November, in both California and Congressional races. If that proposed system were in place in Kentucky, where the May Senate primary was known nationally as Rand Paul’s decisive victory, in fact the two Democratic Senate candidates, Jack Conroy and Daniel Mongiardo, would face each other again in a rematch, leaving Paul, who received less votes than both Democrats, out of the November election altogether.
In California, both political parties oppose Proposition 14, because it threatens their power. California is crippled financially, with Democrats and Republicans unwilling to agree on a path forward, and with voter-driven financial restrictions on tax increases. Voters, of course, can at the same time demand spending increases through the Proposition system.
In Arkansas, Senator Blanche Lincoln is fighting for her political life in a run-off against Lt. Governor Bill Halter. Will we see a Halter-top? Unions committed to this election after Lincoln reversed her position on the Public Option and Card Check. Predictably, this is yet another centrist that will be defeated. David Brooks wrote an excellent column recently about two competing theories of change, founded in the writings of Thomas Paine and Edmund Burke:
“We Americans have never figured out whether we are children of the French or the British Enlightenment…Today, if you look around American politics you see self-described conservative radicals who seek to sweep away 100 years of history and return government to its preindustrial role. You see self-confident Democratic technocrats who have tremendous faith in the power of government officials to use reason to control and reorganize complex systems. You see polemicists of the left and right practicing a highly abstract and ideological Jacobin style of politics. The children of the British Enlightenment are in retreat. Yet there is the stubborn fact of human nature. The Scots were right, and the French were wrong. And out of that truth grows a style of change, a style that emphasizes modesty, gradualism and balance.”
Is a Halter victory a victory for the French Enlightenment? Not quite, but it is a sign that centrists, as Brooks eloquently writes, lack a clear identity. Too often, we just see what they are against, and not what they are for. Lincoln, in a desperate bid to save her political seat, took a bold step with an amendment to reform derivatives. Unfortunately, the amendment will die in committee. Lincoln only played that card when she was desperate; that was obvious to everyone.
It is sometimes difficult to keep up with all of the complex technological changes going on in our society. Take Facebook, for example.
If you haven’t seen this illuminating diagram, which illustrates the changes to Facebook Privacy between 2005-2010, you might not fully grasp how easily your personal information may leak onto the world-wide web. Facebook is constantly looking for ways to monetize the assets that they have, namely, your personal information. Recently Facebook made another huge change, implementing a platform that they call Connections. Here are some helpful warnings about Connections. You may want to check your privacy settings, at a minimum.
James Kwak, co-author of 13 Bankers, as well as the blog Baseline Scenario, decided to delete all of his personal information from the site. If you are unsure about how much gets onto the world wide web, just check out this site.
However, this phenomenon is not limited to Facebook. Last week, the U.S. Stock market plumeted 700 points in a matter of minutes. It partially rebounded, but at the end of the day, the heads of NASDAQ and NYSE were trading blame, and it appears that the smart people designing the complex electronic trading mechanisms do not fully understand them.
When told that 50-75% of all stock trades are High Frequency, automated trades, that transact by the miliseconds, Duncan Niederauer, CEO of NYSE said “everyone has to compete on technology, we’re all going to ask ourselves is how fast is too fast, when is enough enough. But, as long as there is technologically-enabled market making out there, everyone has got to compete for that market share.”
Felix Salmon, financial blogger for Reuters, calls this a new era of volitility:
“The lesson to learn is that given the complexity of contemporary financial markets, correlations can pop up anywhere, and a relatively small uptick in something like Portugese CDS spreads can combine with a glitch somewhere in the equity markets to get magnified into an event which wipes out hundreds of billions of dollars in capitalization in the blink of an eye. Or maybe it was the UK election, or a butterfly flapping its wings in Kuala Lumpur: there’s no way of ever knowing.”
The complexity inherent in the stock markets is eerily reminiscent of the complex financial products which led to the collapse of our economy. Some of the Collateralized Debt Obligations and Derivatives were poorly understood by the people in charge at firms like Bear Sterns. As a result, they did not comprehend the risk those products held to our country. For a good blow-by-blow account of how the people in charge at Bear Sterns were unable to grasp the complexity of those products, check out William Cohen’s House of Cards.
While Facebook and High-Frequency Trading are not obviously related, they both amount to systems that are inherently complex. Our society will only become more and more automated, we cannot just accept that complexity, we must remain aware and vigilant.
UPDATE (5/28): This great column from David Brooks discusses how complexity and our inability to understand it played a huge role in the Oil Spill.