Polarization in Politics
John Lloyd, in the Financial Times, reviews a book about politics in America (When ‘I agree’ is the hardest word). The book is “The Disappearing Center,” by Alan Abramowitz. It is not a very satisfying review, but it is hard to tell whether the fault is with the reviewer or the book’s author.
Basically, the thesis is that America is now where Europe used to be decades ago–ideologically divided. This can be good because it gives voters a clear choice, But, says the author (or Lloyd) “it renders the US government…constantly gridlocked.”
The assumption is that it is better to do something than allow the status quo to continue. But, historically Americans have preferred divided government. Because of the financial crisis the left gained complete control and America now has a health reform law that the majority, based on the polls, did not want. Whether this is good or bad obviously depends on where we are on the ideological spectrum.
The polarization is based to a large extent on demographics. On the Democratic side are the non-whites and single women. On the Republican side there is stronger identification with the party, and its expressed values, by white Christian married people. So, if future politics is determined by demographics the outlook for the Republican party is not bright. If America becomes like Europe today’s Republicans will become an extinct breed.
Another way to look at the situation is that in Europe the beneficiaries of government services now outnumber the people who pay for those services. This is not quite accurate because with the VAT tax in Europe everybody pays. A better way to express it might be to say that European politics is dominated by the consumers of taxes, rather than the producers of taxes. That is why Lloyd writes that in Europe the dividing lines are “on the speed of debt reduction and the depth and direction of cuts to public spending, not differences in principle.”
What this means is that if the consumers of taxes gain the upper hand in America it will end the ideological struggle, as has already occurred in Europe. Whereas Ronald Reagan sought to curtail growth of the public sector by cutting taxes Barack Obama has succeeded in adding another unfunded entitlement, which may make it necessary to introduce the VAT in America. That means both parties will have to focus on how to manage the public sector.
In Europe’s southern tier there are several countries with public spending budgets their economies cannot afford. Germany is being asked to spread its wealth to bail out these countries. It is understood Germany is not to blame, but Germans will be harmed if they refuse to go along.
A healthy economy must have a balance between consumption and production. Politicians often seem not to understand this and that is because consumers have more votes than the producers. The New York Times writes editorially today that Americans are already beginning to see the benefits of health care reform (End to Rescission, and More Good News). The new law requires insurance companies–starting in September- to end the practice of rescinding coverage after a policyholder gets sick. It seems that buyers of insurance do not always tell the truth about their medical condition. The NYT writes:
“Many of the other major provisions of reform don’t kick in until 2014, but it is already changing the behavior of insurers. That means more security for many Americans who might otherwise find insurance unaffordable or unavailable.”
The Times never mentions that insurance companies will have to raise their premiums to cover the additional costs. Otherwise, they will not have the money to pay doctors, hospitals and other providers.
2 Responses to “Polarization in Politics”
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I dunno, it seems to be simple calculus to me. Democrats were always in favor of middle class tax cuts, so that aside what is the extra cost in a two year extension of millionaire tax cuts? 140 billion. For that they got 56 billion of unemployment extensions and reduction of payroll tax. All in all not a bad deal considering the alternative of doing nothing at all. Politically, the Republicans have a problem in forcing this issue.
Tell the Iraqi and Afghani people that we’re ‘better than most.’ 100,000+ dead Iraqis because of our war that should have ended up with Bush and Cheney sent to an international war crimes court.