In “The Case for Low Ideals” Bobo gurgles that the idealism of President Obama’s 2008 campaign seems foolish now, but idealism, a different kind, still has a place in American politics. In the comments “Diana Moses” of Arlington, Mass. had this to say: “I found myself trying to put my finger on why this column comes across to me as self-serving. I guess it sounds to me as though the writer is basically saying, “The system works for me, too bad if it doesn’t for you.” ” Exactly. It’s FYIGM. Prof. Krugman, in “What Markets Will,” says the financial turmoil of the past few days, especially in Europe, has policy crusaders again sure that they know what the markets are asking for. Here’s Bobo:
Let’s say you came of political age during Barack Obama’s 2008 campaign. Maybe you were swept up in the idealism. But now you’ve seen an election driven by hope give way to an election driven by fear. Partisans are afraid the other side might win. Candidates are pawns of the consultants because they’re afraid of themselves. Everybody’s afraid of the Ebola virus, ISIS and the fragile economy.
The politics of the last few years have made you disappointed, disillusioned and cynical. You look back at your earlier idealism as cotton candy.
Well, I’m here to make the case for political idealism.
I’m not making the case for the high idealism that surrounded that 2008 campaign. It was based on the idea that people are basically innocent and differences can be quickly transcended. It was based on the idea that society is easily malleable and it’s possible to have quick transformational change. It was based in the idea of a heroic savior (remember those “Hope” posters).
I’m here to make the case for low idealism. The low idealist rejects the politics of innocence. The low idealist recoils from any movement that promises “new beginnings,” tries to offer transcendent “bliss to be alive” moments or tries to fill people’s spiritual voids.
Low idealism begins with a sturdy and accurate view of human nature. We’re all a bit self-centered, self-interested and inclined to think we are nobler than we are. Montaigne wrote, “If others examined themselves attentively, as I do, they would find themselves, as I do, full of inanity and nonsense. Get rid of it I cannot without getting rid of myself.”
Low idealism continues with a realistic view of politics. Politics is slow drilling through hard boards. It is a series of messy compromises. The core functions of government are negative — putting out fires, arresting criminals, settling disputes — and much of what government does is the unromantic work of preventing bad situations from getting worse.
Politicians operate in a recalcitrant medium with incomplete information, bad options and no sleep. Government in good times is merely dull; when it is enthralling, times are usually bad.
So low idealism starts with a tone of sympathy. Anybody who works in this realm deserves compassion and gentle regard. The low idealist knows that rallies with anthems and roaring are just make-believe, but has warm affection for any politician who exhibits neighborliness, courtesy and the ability to listen. The low idealist understands that those who try to rise above the messy business of deal-making often turn into zealots and wind up sinking below it. On the other hand, this kind of idealist has a full heart for those who serve the practical work of legislating: James Baker and Ted Kennedy in the old days; Bob Corker and Ron Wyden today. Believing experience is the best mode of education, he favors the competent old hand to the naïve outsider.
The low idealist is more romantic about the past than about the future. Though governing is hard, there are some miracles of human creation that have been handed down to us. These include, first and foremost, the American Constitution, but also the institutions that function pretty well, like the Congressional Budget Office and the Federal Reserve. Her first job is to work with existing materials, magnify what’s best and incrementally reform what is worst.
The businessman might be enamored of disruptive change, but the low idealist abhors it in politics. The low idealist liked Obama’s vow to hit foreign policy singles and doubles day by day, so long as there is a large vision to give long-term direction.
The low idealist admires a different kind of leader; not the martyr or the passionate crusader or the righteous populist. He likes the resilient one, who maybe has been tainted by scandals and has learned from his self-inflicted wounds that his own worst enemy is himself.
He likes the person who speaks only after paying minute attention to the way things really are, and whose proposals are grounded in the low stability of the truth.
The low idealist lives most of her life at a deeper dimension than the realm of the political. She believes, as Samuel Johnson put it, that “The happiness of society depends on virtue” — not primarily material conditions. But, and this is what makes her an idealist, she believes that better laws can nurture virtue. Statecraft is soulcraft. Good tax policies can arouse energy and enterprise. Good social programs can encourage compassion and community service.
Low idealism starts with a warts-and-all mentality, but holds that people can be improved by their political relationships, so it ends up with something loftier and more inspiring that those faux idealists who think human beings are not a problem and politics is a mostly a matter of moving money around.
Of course Bobo’s crowd only wants it to move in one direction. Welcome to the new Gilded Age. Here’s Prof. Krugman:
In the Middle Ages, the call for a crusade to conquer the Holy Land was met with cries of “Deus vult!” — God wills it. But did the crusaders really know what God wanted? Given how the venture turned out, apparently not.
Now, that was a long time ago, and, in the areas I write about, invocations of God’s presumed will are rare. You do, however, see a lot of policy crusades, and these are often justified with implicit cries of “Mercatus vult!” — the market wills it. But do those invoking the will of the market really know what markets want? Again, apparently not.
And the financial turmoil of the past few days has widened the gap between what we’re told must be done to appease the market and what markets actually seem to be asking for.
To get more specific: We have been told repeatedly that governments must cease and desist from their efforts to mitigate economic pain, lest their excessive compassion be punished by the financial gods, but the markets themselves have never seemed to agree that these human sacrifices are actually necessary. Investors were supposed to be terrified by budget deficits, fearing that we were about to turn into Greece — Greece I tell you — but year after year, interest rates stayed low. The Fed’s efforts to boost the economy were supposed to backfire as markets reacted to the prospect of runaway inflation, but market measures of expected inflation similarly stayed low.
How have policy crusaders responded to the failure of their dire predictions? Mainly with denial, occasionally with exasperation. For example, Alan Greenspan once declared the failure of interest rates and inflation to spike “regrettable, because it is fostering a false sense of complacency.” But that was more than four years ago; maybe the sense of complacency wasn’t all that false?
All in all, it’s hard to escape the conclusion that people like Mr. Greenspan knew as much about what the market wanted as medieval crusaders knew about God’s plan — that is, nothing.
In fact, if you look closely, the real message from the market seems to be that we should be running bigger deficits and printing more money. And that message has gotten a lot stronger in the past few days.
I’m not mainly talking about plunging stock prices, although that’s surely telling us something (but as the late Paul Samuelson famously pointed out, stocks are not a reliable indicator of economic prospects: “Wall Street indexes predicted nine out of the last five recessions!”) Instead, I’m talking about interest rates, which are flashing warnings, not of fiscal crisis and inflation, but of depression and deflation.
Most obviously, interest rates on long-term U.S. government debt — the rates that the usual suspects keep telling us will shoot up any day now unless we slash spending — have fallen sharply. This tells us that markets aren’t worried about default, but that they are worried about persistent economic weakness, which will keep the Fed from raising the short-term interest rates it controls.
Interest rates on much European debt are even lower, because Europe’s economic outlook is so bad, and we’re not just talking about Germany. France is currently in conflict with the European Commission, which says that the projected French deficit is too big, but investors — who are still buying French bonds despite a 10-year interest rate of only 1.26 percent — are evidently much more worried about European stagnation than French default.
It’s also instructive to look at interest rates on “inflation-protected” or “index” bonds, which are telling us two things. First, markets are practically begging governments to borrow and spend, say on infrastructure; interest rates on index bonds are barely above zero, so that financing for roads, bridges, and sewers would be almost free. Second, the difference between interest rates on index and ordinary bonds tells us how much inflation the market expects, and it turns out that expected inflation has fallen sharply over the past few months, so that it’s now far below the Fed’s target. In effect, the market is saying that the Fed isn’t printing nearly enough money.
One question you might ask is why the market’s pro-spending, print-more-money message has suddenly gotten louder. My guess is that it’s mainly driven by events in Europe, where the slide into deflation and the growing public backlash against austerity have reached a tipping point. And it’s very reasonable to worry that Europe’s problems may spill over to the rest of us.
In any case, the next time you hear some talking head opining on what we must do to satisfy the markets, ask yourself, “How does he know?” For the truth is that when people talk about what markets demand, what they’re really doing is trying to bully us into doing what they themselves want.