Political Animal


June 05, 2012 11:00 AM Elites and Intellectual Failure

By Ryan Cooper

I agree mostly with Matt Yglesias’ diagnosis of the scariness of American political institutions, and the even greater uneasiness that European institutions inspire. I want to quibble with this graf however:

Think seriously about it and you’ll see that it just can’t be that everyone in Frankfurt and Brussels and Berlin and Madrid and Athens is incredibly stupid. Rather, the eurozone has blundered into a set of institutional arrangements that can’t process the issues correctly and the rest of us can just stand and watch the wreckage unfold. Our problems are completely different in origin but similar in some important respects. Luce’s book is the story of a United States that’s suffering from a variety of fairly well-known problems that intellectually seem far from unsolvable. And yet our political system, for some fairly profound reasons, just isn’t working on solving the problems. Instead, it’s leaping toward another terrifying and pointless debt ceiling showdown even as political punditry remains excessively focused on personality conflicts rather than the structural roots of this dysfunction. It’s time to start thinking.

Again, I think that this diagnosis of institutional failure is correct, and also that solutions to our problems are intellectually pretty easy. However I think the analysis of that failure has to include some room for straight-up inability to correctly understand things (for whatever reason, be it ignorance, stupidity, or some kind of prejudice). Check out this little segment with Paul Krugman and a couple British conservatives:

(As an aside, I do enjoy how the TV norms in Britain seem to lean more towards actual, back-and-forth discussion, rather than a bunch of hacks shouting carefully crafted talking points at each other.) It was striking to me how unable the conservatives were to actually engage with Krugman’s points. He kept trying to separate the idea of being in a depression from other points about debt, deregulation, and the size of the state, and the conservatives simply didn’t get it (see especially about 6:30). I’m reminded of 2010-2011, where Obama and his team made a “pivot” to concentrating on debt and deficits that was, from an intellectual or political standpoint, utterly boneheaded.

The whole political discourse these days is strongly reminiscent of the Great Depression years. Herbert Hoover presided over three years of disastrous economic failure, but went round saying things like:

Nothing is more important than balancing the budget with the least increase in taxes. The Federal Government should be in such position that it will need issue no securities which increase the public debt after the beginning of the next fiscal year, July 1. That is vital to the still further promotion of employment and agriculture. It gives positive assurance to business and industry that the Government will keep out of the money market and allow industry and agriculture to borrow the monies required for the conduct of business.

It wasn’t just an institutional problem with Hoover. All the institutional incentives were lined up for him to fix the depression; he didn’t, and as a result was utterly crushed at the polls in 1932. He was captured by an ideology that prevented him from operating in his own political self-interest. The same goes for most of the political elites in Europe, and Obama to a lesser extent. (Hoover deserves a bit more of an excuse, I suppose, in that there wasn’t much of an economic consensus back in his day, but given how conservatives are prone to quoting his ideas nearly verbatim today I reckon even if Paul Krugman had been around back in 1930 Hoover would have done the same things.)

Being young and poor and therefore utterly divorced from the elites in this country, I can’t say for sure what’s happening here, but I have a suspicion that there is a rarefied culture among the elite (as Digby would call it, the Village) which basically makes them stupid. Elites are mostly very wealthy, which usually brings an enormous dose of self-regard and arrogance, as well as the belief that because they themselves became rich doing things in the economy, they therefore understand how it works. It’s small and very insidery, and peer pressure and groupthink can make espousing out-group principles socially problematic. All that together and we have an elite culture which has a strong tendency to settle on simple, intuitive, emotionally appealing economic ideas like Hoover’s, while excluding people like Krugman as “unserious” or unwilling to “make tough choices.” That, maybe, is how you get career politicians doing the electoral equivalent of shooting themselves in the face.

So any institutional design should take this tendency into account, and somehow provide a way for political elites to be able to correctly predict the consequences of their policies. For more on elite culture, and how it develops, I very highly recommend Chris Hayes’ new book Twilight of the Elites, available soon.

Ryan Cooper is the Monthly handyman. Follow him on Twitter: @RyanLouisCooper

Ryan Cooper is a National Correspondent at The Week, and a former web editor of the Washington Monthly. Find him on Twitter: @ryanlcooper


  • emjayay on June 05, 2012 11:10 AM:

    I'm sure every college graduate and everyone else as well are iching to open their very own private business. If everyone could start their own FaceBook or Apple, think how great things would be. Maybe they can all borrow 10 or 20K from their parents or something.

    I wish they had even more time for PK to explain how economies work to those two upper class right wing Britsnobs. He may have eventually felt the need to get up and slap 'em however.

    One thing about British news shows: They all look like they hired a top theatrical set designer. In 1978.

  • emjayay on June 05, 2012 11:12 AM:

    Sorry about any typos. The once great Preview feature here at WM stopped making sense some months ago, so I don't use it, obviously.

  • bloomingpol on June 05, 2012 11:14 AM:

    When in doubt as to a cause, follow the money. When you are going to get rich on other people's misery, your ability to hear any opposition disappears. It may appear they don't understand, but they do. They just want the money for themselves and their friends more than they want to do a decent job for their constituents.

  • Shelly on June 05, 2012 11:25 AM:

    Exhibit A of the elite stupidity bias is today's David Brooks column. He says that a Scott Walker victory in Wisconsin shows that voters appreciate that he balanced the budget, and that voters who want to toss him out are doing so because of his budget. He completely ignores the central issue in this race -- the gutting of public unions' collective bargaining rights. THAT is what this race is about (from the Democrats' point of view anyway). Brooks also fails to note that other governors have managed to cut expenditures without completely eviscerating public unions -- Cuomo, Malloy, even Christie to a lesser degree.

    Brooks also ignores (or is somehow unaware of) the fact that the unions in Wisconsion were willing to discuss the budgetary issues but Walker was more interested in gutting the unions' power.

  • Basilisc on June 05, 2012 11:33 AM:

    It's important to remember that, even if certain solutions are well accepted by experts in a field, they may not be familiar to or understood by the actual decision-makers. So they just don't enter into the policy discussion, or if they do it's as a "maverick", "outsider" view.

    Elites today came of age in the 80s and 90s, when the main issue - maybe even the only issue much of the time - was reducing the deficit. Some also remember the 70s, wen the main issue - maybe even the only issue much of the time - was reducing inflation. So they reflexively look at any and all policies in terms of whether they reduce the deficit, except maybe taking some time out to make sure the Fed is doing what it needs to do to reduce inflation.

    The use of fiscal policy to dampen business cycles is well understood by (mainstream) economists, but is foreign to policy makers because it simply hasn't been a publicly debated issue since the 1930s. And it's not even well understood by many academic economists (as Krugman never tires of pointing out), for the same reason.

    This also explains the reflexive urge in some circles to reduce social security benefits. Social security was a big, big political issue in the 80s, and politically painful steps had to be taken to raise contributions and/or cut benefits. And guess what - the right steps were taken. The payroll tax was increased, and the retirement age was raised. Social Security now is still not 100% safe, but it will take only some minor tweaks to make it so. But elites still aren't used to thinking this way, because they spent so much time being told that Social Security was in a terrible crisis.

    The same is the case in Europe - the overwhelming issue in most countries since the 1980s has been getting deficits under control, structural reform, and taming inflation. So the idea that the euro is not well suited to a different set of challenges, such as financial sector weaknesses or payments imbalances, is simply not something that today's European elites are able to handle. So they reflexively respond to any and all crises by saying how important it is to balance budgets, pass structural reforms, and to control inflation. They really don't know any other way.

    Understandable, though kind of pathetic, really.

  • John on June 05, 2012 11:38 AM:

    I disagree a little with your characterization of the rich. Most people don't have a deep theoretical understanding of how things work. How anything works. It is just not in our nature. Cialdini writes well about this. So you have a group of people who have a lot of wealth and are not really sure how that happened, but they have latched on to some narratives to help them explain it. Add to that they are very risk averse and don't want to lose that wealth. Anything that threatens their world view or seems to threaten their wealth will be very threatening.

  • emjayay on June 05, 2012 11:48 AM:

    If you are going to portray yourself as an expert on economic issues, maybe you should have at least taken Econ 101 in college. (I mean people publicly going on about it, not the commenters above). I think PK has pointed out that everything he talks about was covered there.

    "Anything that threatens their world view or seems to threaten their wealth will be very threatening." Yup. And apparently erase everything in their brain from Econ 101 if they did take it.

  • jim filyaw on June 05, 2012 12:18 PM:

    gee! amity shlaes told us that hoobert heever was the prototype fdr! who can you trust these days?

  • Robert on June 05, 2012 12:23 PM:

    Most folks think this recall in Wisconsin is about Walker and his cronies. It is really about the powers/money behind these KOCH meat puppets. These few billionaires are attempting to complete the overthrow of our Republic, and it is working.

  • boatboy_srq on June 05, 2012 12:42 PM:

    I keep hearing from Digby's Village things that make Hoover - and maybe even Coolidge - sound socialist; Hoover's statements, such as the one quoted here, sound remarkably moderate, yet we know now that everything he attempted fell far short of what was required to stop the free-fall from 1929.

    The three key differences between 1929 and 2008 are these: 1) ownership of "investment instruments" is much broader now than it was in the 1920s, so more people were affected this time; 2) 2008 was an election year after two terms of rampant economic mismanagement, not one year into a presidential term, so the opportunity to move away from bad policy was immediate; 3) the options in 1932 were "as-is v. more public investment" where the options now are "as-is v. less public investment". We had an opportunity to act more quickly, and (frankly) Congress squandered it while the fascists prated on about how this was the way things worked and how we would all like it better if they only got more of their own way.

    The way out seems remarkably simple; yet, instead of constructive efforts to address the imploding demand issue, we have overt statements from God's Own Party that the Dickensian nightmare of the 19th century is the best ideal we can seek.

  • smartalek on June 05, 2012 12:50 PM:

    "the central issue in this race -- the gutting of public unions' collective bargaining rights. THAT is what this race is about (from the Democrats' point of view anyway)."

    It's also the central issue for Walker, and his party, and the backers of both, and repeatedly proven to be so, including by statements from Walker himself.
    Not just analogous, but identical, to the way Publicans at the national level only pretend to care about deficits or debt, as a means of getting middle- and working-class voters to support the redistribution of their own money (and opportunity, and power) upward... as they've been doing since before 1980.
    Why does anyone ever accept, even arguendo, that this isn't what's going on, when not only all the evidence, but the admissions of many of the central players, are all undeniable?
    Are you trying to prove the point of that old line that "a liberal is someone so open-minded, they won't take their own side in a fight"?

  • Anonymous on June 05, 2012 12:55 PM:

    Apologies for unclosed italix tag; hopefully (it's grammatically allowable to say that now!) that kind of glitch no longer carries over to the rest of the thread...

  • paul on June 05, 2012 12:55 PM:

    One of the things that's happened in the past 30 years or so is the overwhelming adoption of the start system in the journalism business. Time was, people writing articles of the kind that shaped Village opinion might be making only a few times the median income, even with syndication, and be relying on their defined-benefit pension plans for retirement. Now, between star salaries, speaking fees and book deals and tv appearances and consulting gigs, top journalists' interests are much more aligned with those of the people they cover.

  • jhe on June 05, 2012 1:08 PM:

    Supposedly Hoover blamed Andrew Mellon for pushing him down the liquidationist path when his own instincts were (gradually) leading him in another direction. Additionally, the Keynesian model was fairly new when Hoover was in office so it would have taken someone who was willing to think outside of the box to go another way.

    Hoover was a pretty competent, if cautious guy (sound familiar?)up against something new. The current set of elite decision makers is screwing up easy stuff - Iraq (man was that stupid), the economy, basic financial regulation, civil defense (New Orleans was 4 years after 9/11),etc. Healthcare is even easy if you consider that we could steal the system of almost any developed country and be unambiguously better off.

    Some of this is being on the take, but some of it is just unbelievably stupid in a way that the people driving the bus in this country generally have not been.

  • c u n d gulag on June 05, 2012 1:11 PM:

    Here's the economic paradox that too many of the rich people believe in:

    The more you give the rich, the harder they'll work.

    And the more you take away from the poor, and the middle class, the harder they'll work.

    Nice system they've got going for themselves, eh?

  • boatboy_srq on June 05, 2012 1:45 PM:

    @CUND: more fool them - the more you take away from the poor, the harder they'll fight.

    Didn't like 1789? How about October 1917, then?

  • veblen's dog on June 05, 2012 3:01 PM:

    Some older books are also helpful. I wish more people would read C. Wright Mills' Power Elites again. One of the things that struck me when I read it is that the primary problem for any and all elites is staying in power. This is not a Machiavellian calculation, but an existential assumption, accepted like breathing. Consequently, any solution to a “lesser” problem (financial meltdowns, global warming, etc.) that requires displacement of the elites is not imaginable. If all solutions require their displacement, then the problem simply cannot be addressed; indeed the problem stops being a bug and becomes a feature.

    The other book I would suggest people look at is CV Wedgewood's Thirty Years War. Perhaps the most important thing I took away from that is that the leaders were extremely well-educated average minds with an incredibly bloated sense of entitlement. There were a few notable exceptions like Gustavus Adolphus - brilliant, charismatic, and with an ego the size of a planet (Bill Clinton on horseback), and von Wallenstein (Cheney with sword). But for the most part, the "leaders" were utterly incapable of thinking anything but conventional thoughts. Today, in America, they would be Wall Street financiers.

  • PTate in MN on June 05, 2012 3:19 PM:

    Robert nails it: "Most folks think this recall in Wisconsin is about Walker and his cronies. It is really about the powers/money behind these KOCH meat puppets. These few billionaires are attempting to complete the overthrow of our Republic, and it is working."

    So Ygelisias ponders why our "political system...isn't working on solving the problems" when the parsimonious answer is right there in front of him. One of our two political parties has been taken over by oil industry billionaires with the means, the organizational structures and the motive to dismantle government. Our problems are not being fixed because those problems are not the problems the billionaires want fixed. In fact, these problems are making it easier to enact the billionaire's agenda. Really, a couple of billion dollars carefully invested can easily buy you 10,000 well-placed stooges--like Scott Walker--ready to gut unions, gut regulations, and gut the public sector and safety net and unleash the full force of capitalism.

    The intellectual failure of our elites--in Europe and in the US--can be understood simply as well. For 30 or 40 years, powerful wealthy interests have been arguing that A (small government, a coddled business sector, low taxes) is the right course, and the elite has been extremely successful, flattered and lionized, by promoting A and attacking B (a larger government, more regulated markets & higher taxes.) However, now that A has failed them, they need to accept B. But, as someone once said, it is very hard to get someone to understand something when their paycheck depends on them not understanding it. It is as unthinkable to them to renounce A and adopt B--even in the short term--as it would be for a fundamentalist Christian to become a Muslim.

  • nerd on June 05, 2012 10:32 PM:

    Watching the video was like me talking to one of my co-workers. The economy works by money moving around. If everyone is in austerity mode where they are not spending money the money isn't moving much so there is no way for recovery to happen. Simple concept but completely over the head of too many folks.