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March 24, 2014 11:27 AM The Pre-Obama Garden of Eden

By Ed Kilgore

If there is any magic formula for the relative strength of contemporary conservative ideology, it’s in the Right’s ability simultaneously to embrace a radical vision of what America could become without all the socialist baggage of the New Deal and Great Society while battening on public fear of change. This is in no small part how Republicans have managed to turn many Medicare beneficiaries into angry opponents of Obamacare. And more broadly, it’s how the centrist Obama and a centrist Democratic Party have been cast in the role of radical social engineers tampering with the world’s most successful nation—snakes entering the pre-Obama Garden of Eden—even as the authors of this revisionist history attack public policies that enjoyed bipartisan support for decades.

This disjunction becomes especially obvious when conservatives are fighting relatively modest adjustments in the status quo such as a minimum wage increase aimed at restoring its value after gradual erosion by inflation, or a recalibration of public subsidies for health insurance that includes people excluded by the status quo.

The conservative defense of the status quo reached new heights in a New York Times column by that warhorse of official Republican economics, Gregory Mankiw, who sagely advised against any effort to disturb the settled wisdom of the day before yesterday:

[W]hen people have voluntarily agreed upon an economic arrangement to their mutual benefit, that arrangement should be respected. (The main exception is when there are adverse effects on third parties — what economists call “negative externalities.”) As a result, when a policy is complex, hard to evaluate and disruptive of private transactions, there is good reason to be skeptical of it.
As I see it, the minimum wage and the Affordable Care Act are cases in point. Noble as they are in aspiration, they fail the do-no-harm test. An increase in the minimum wage would disrupt some deals that workers and employers have made voluntarily. The Affordable Care Act has disrupted many insurance arrangements that were acceptable to both the insurance company and the insured; these policies were canceled because they deviated from lawmakers’ notion of the ideal.

One major problem with this exaltation of voluntary “arrangements,” of course, is that they ignore the role of public policy in creating them. Mankiw’s argument against a minimum wage increase is an argument against any minimum wage laws at all. And with respect to health care, the “insurance arrangements” he’s urging us to respect are based on a public tax preference for certain kinds of health insurance offered to certain kinds of people by certain kinds of third parties. This is the most obvious reason for the reluctance of Republicans to fully embrace their own “vision” of health care reform, which would be more disruptive of the status quo than anything in the Affordable Care Act.

At TNR Isaac Chotiner responds to Mankiw by challenging his premise of naturally suitable status quo being upset by liberals’ “notion of the ideal:”

We already had a healthcare system that made all kinds of trade-offs. And many people, of course, never really “voluntarily agreed” to the system, even if they were lucky enough to have had insurance. Was paying high premiums because of pre-existing conditions a choice? Was taking the plan from your employer a choice? In Mankiw’s world, however, things only became disruptive after Obamacare.
The status quo, whether in terms of the minimum wage or healthcare, was not just some completely fair system that is now being messed with by statist liberals. Our system of government and economy have been “disruptive” for a very long time.

The real irony here is that it is largely conservatives who have a “notion of the ideal” with respect to government’s role in the economy, and it’s one that if fully exposed would lead them to electoral catastrophe. And so they champion the status quo ante when it’s relatively popular, building support until the day when they can overturn it entirely.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

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