Apparently, my InsideSources op-ed on the lack of attention to fiscal conservatism in our nation’s capital did not sit too well everywhere. I have received some very good comments, but also some feedback suggesting that some people in – shall we say – influential circles aren’t too happy with my criticism.
That’s fine. It’s just business. Or politics, if you will. We all debate, agree, disagree and hope that the best argument will win.
Or that’s what this should be all about. Unfortunately, the world of public policy, where politics, pundits and think tanks intersect, is often driven by the wrong currency: influence. He who can get closest to the people in power is the one who defines the agenda.
This is understandable to some degree. After all, good contacts mean you can talk to those in power about policy reform. That said, my own experience from 40+ years in politics and public policy is that those in power have a default preference for inertia: it is politically costly to change things, therefore only those changes are acceptable that benefit those in power. This is the basic rule of the game, and it is the rule of the game we cannot change.
Perhaps we should not change it either, unless we are damned sure that what we get instead is actually better.
So long as the rule of inherent inertia remains in place, those of us in public policy have a choice to make. We can operate by the currency that gives us influence, choosing in the bargain to water down our own principles and policy reform ideas to where they become palatable to the people in power. We can also choose to operate by our own currency, with an unwavering commitment to our principles and stick to those reforms that reflect our principles to the fullest.
The former strategy is the one chosen by most free-market think tanks. It has given some of them a straight line into the inner circles of power, where their employees can participate in White House policy making and get instant access to high-ranking members of Congress.
That sounds good, because it helps fundraising and it allows these organizations to pay their employees handsomely. The downside, of course, is that once you are “inside”, you don’t want to be thrown “outside” again. Your entire organization now operates at the mercy of your contacts with those on the inside.
Influence becomes your currency. To keep trading in it, you gradually have to distance yourself from the principles upon which you once embarked on your public-policy career. The inherent inertia of politics forces you to adapt your own work to that inertia. If your principles say “minimal state” and the political inertia say “welfare state”, the tension between principles and influence will continue to grow over time. The welfare state expands over time, its growth being driven by its ideological algorithm. Inevitably, as you keep trading in the currency of influence the minimal state becomes an increasingly distant spot on the horizon in your rearview mirror.
Which brings us back to my op-ed and my criticism of a well intended but highly irresponsible idea for a federal income-tax holiday. It is a case in point of an idea defined by influence, not principles. The author, whom I know and respect, proposed the idea because he thought it was a good path to a smaller budget deficit (with GDP growth generating enough tax revenue to close the gap). This analysis is wrong for reasons I am not going to repeat here; what matters is instead what was omitted.
A plan to abolish the welfare state.
It is an inescapable fact that the American welfare state is the reason we have an enormous budget deficit. Yet the inertia of our political institutions favors the welfare state. Cutting across both party lines, the idea of massive economic redistribution is entirely entrenched within the collective mindset of our political leadership.
Any policy-reform ideas that are imported from the outside on the currency of influence will have to be aligned with this welfare-state inertia. Steve Moore’s idea for a temporary income-tax holiday is an excellent example of how this happens: instead of proposing the logical – and urgently necessary – alternative of reforming away the welfare state, he brings forward the politically palatable notion of an income-tax holiday.
That his idea would be a macroeconomic disaster – it would leave the door wide open for Mad Monetary Theory – is an acceptable price when you trade in the currency of influence.
Steve Moore is just one example of many. I could tell stories of think tanks that are little more than extensions of either political party, hidden behind a thin veil of tax-exempt compliance. But the actual examples don’t matter; what matters is the practice, the conventional wisdom that you not only can, but should adapt your public-policy work to the inherent inertia of our political institutions.
But what is the alternative?
In two words: hard work. Take the long route. Educate the public. Bring awareness out to the American people of what you want, how you think, why you think that way. Win Americans over, one at a time. Let the voters know what the better argument is. Educate the taxpayer on the options that are superior to economic redistribution.
Yes, it’s hard work. It is a daunting task, an unglamorous existence toiling in the trenches of public opinion. You will never make $300,000 a year doing this.
But you will win eventually. If you believe in your principles and your own ability to talk to anyone, anywhere, at any time about what you believe in, then you will eventually win.
It is also more cost effective. For every $100 spent on political influence, $10 spent on educating the American public will make a much bigger difference over time. Why? Because when you talk to the American people, your currency is not political influence.
Your currency is liberty.