Americans Are Stuck With Inept Versions of Both Parties

The financial crisis, Obamacare, and disinterest in fixing dysfunction in the system


Wouldn't it be nice if Republicans were hellbent on reforming the financial sector and Democrats were determined to get bureaucrats operating with competence and efficiency? Saying so makes one sound like a starry-eyed dreamer. In our political system, people like Elizabeth Warren focus on fighting Wall Street pathologies, while the GOP highlights government incompetence.

Short-term incentives drive that behavior, but the opposite approach would make more sense in the long run. Republicans' ability to bring about the America they want depends on public confidence in capitalistic financial markets. The progressive project requires a competent public sector.

I am hardly the first to notice this. Take a look at two passages, one about the financial crisis, the other about the Obamacare rollout. In the autumn of 2009, Luigi Zingales in National Affairs noticed that the financial crisis and its aftermath were bad news for supporters of free-market capitalism (emphasis added):

The economic crisis of the past year, centered as it has been in the financial sector that lies at the heart of American capitalism, is bound to leave some lasting marks. Financial regulation, the role of large banks, and the relationships between the government and key players in the market will never be the same.

More important, however, are the ways in which public attitudes about our system might change. The nature of the crisis, and of the government's response, now threaten to undermine the public's sense of the fairness, justice, and legitimacy of democratic capitalism. By allowing the conditions that made the crisis possible (particularly the concentration of power in a few large institutions), and by responding to the crisis as we have (especially with massive government bailouts of banks and large corporations), the United States today risks moving in the direction of European corporatism and the crony capitalism of more statist regimes. This, in turn, endangers America's unique brand of capitalism, which has thus far avoided becoming associated in the public mind with entrenched corruption, and has therefore kept this country relatively free of populist anti-capitalist sentiment.

And New Republic Editor Franklin Foer recently wrote of the Obamacare rollout:

Liberalism has spent the better part of the past century attempting to prove that it could competently and responsibly extend the state into new reaches of American life.

With the rollout of the Affordable Care Act, the administration has badly injured that cause, confirming the worst slurs against the federal government. It has stifled bad news and fudged promises; it has failed to translate complex mechanisms of policy into plain English; it can’t even launch a damn website. What’s more, nobody responsible for the debacle has lost a job or suffered a demotion. Over time, the Affordable Care Act’s technical difficulties can be repaired. Reversing the initial impressions of government ineptitude won’t be so easy.

The obviousness of these insights, and the fact that they've been publicly aired many times, hasn't seemed to affect the behavior of the Republicans and Democrats who run things. A catastrophe as historic as the financial crisis may have persuaded George Will that America ought to break up the big investment banks. Franklin Foer may grasp that the Obamacare rollout does harm to the liberal project, just as Kevin Drum grasps that the staggering ineptitude behind California's joke of a high-speed-rail project gives liberals a bad name.

But ideological orthodoxies and interest-group capture prevent our political class from responding to even the most staggering failures in the way you'd hope. The country would be in fine shape if we were going back and forth between the best version of American conservatism and the best version of American liberalism. Instead we're bouncing back and forth between degraded versions of both.

That's why, despite the flaws of the Tea Party, Ross Douthat is right that an improved version of it is a better bet for GOP reformers than a return to the establishment that gave us the Iraq War, the K Street Project, and Wall Street bailouts. And it's why Larry Lessig's critique of Barack Obama remains the most potent:

I believed that he had a vision of what was wrong with our government, and a passion and commitment to fix it .... In speech after speech, Obama described the problem of Washington just as I have, though with a style that is much more compelling. It was this theme that distinguished Obama most clearly from the heir apparent to the Democratic nomination, Hillary Clinton. For Clinton was not running to "change the way Washington works." She stood against John Edwards and Barack Obama in their attack on the system and on lobbyists in particular. As she told an audience at YearlyKos in August 2007: "A lot of those lobbyists, whether you like it or not, represent real Americans. They represent nurses, they represent social workers, yes, they represent corporations that employ a lot of people."  .... Instead, Clinton's vision of the presidency was much like her husband's .... She saw the job of president to be to take a political system and do as much with it as you can. It may be a lame horse. It may be an intoxicated horse. But the job is not to fix the horse. The job is to run the horse as fast as you can .... Nowhere on that list was fundamental reform of how Washington worked.

I thought Obama got this. That's what he promised, again and again. That was "the reason [he] was running for President[—]to challenge that system." Yet Obama hasn't played the game that he promised. Instead, the game he has played has been exactly the game that Hillary Clinton promised and that Bill Clinton executed: striking a bargain with the most powerful lobbyists as a way to get a bill through—and as it turns out, the people don't have the most powerful lobbyists. As I watched this strategy unfold, I could not believe it. The idealist in me certainly could not believe that Obama would run a campaign grounded in "change" yet execute an administration that changed nothing of the "way Washington works." 

But the pragmatist in me also could not believe it. I could not begin to understand how this administration thought that it would take on the most important lobbying interests in America and win without a strategy to change the power of those most important lobbying interests. Nothing close to the reform that Obama promised is possible under the current system; so if that reform was really what Obama sought, changing the system was an essential first step.

If Chris Christie runs against Hillary Clinton, I expect he'll pick up on this theme. Obama could preempt that attack by holding the appropriate bureaucrats responsible for the Obamacare rollout failure and successfully reforming the way federal IT projects run so that government is capable of building a website. But does anyone have confidence that he'll achieve those things?

I am not even sure that he'll seriously attempt them.