The last three years have tested the U.S. political system’s capacity to manage crises. How did we do?
I’ll quote Standard & Poor’s: “The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges.”
Not well, in other words. Yet we deserve some credit. We did respond swiftly and decisively in 2008-09 to a financial crisis that, judging from the data, could have been as bad or worse than the Great Depression. We saved the auto industry and passed a stimulus that kept millions of people working. We didn’t default on our debt, or shut the government down. The financial crisis proved that our political system, as polarized and sclerotic as it is, can act if the consequences are sufficiently grave.
So it’s not crises I’m most worried about when peering into our economic future. It’s the non-crises. It’s legislating when disaster doesn’t loom. It’s taking advantage of economic opportunities and preventing future emergencies. It’s governing, as opposed to firefighting.
Resistant to Action
Compared with other political systems in other industrialized democracies, our system is unusually reliant on consensus and resistant to action. In many countries, there’s no such thing as “divided government,” where one party controls the executive branch and the other runs the legislature. Nor is there a filibuster, a debt ceiling, or, to go back to one of the primary impediments to action of the civil rights era, a House Rules Committee. It’s simply easier for governments elsewhere to get things done (though it’s not necessarily easier, as the euro region shows, for those governments to get things done in cooperation with one another).
As the political scientists Sven Steinmo and Jon Watts concluded in “It’s the Institutions, Stupid,” their 1995 paper on health-care reform, the United States is “the only democratic country that does not have a comprehensive national health insurance system because American political institutions are structurally biased against this kind of comprehensive reform.”
Passage of the Affordable Care Act last year brought us closer in line with our international peers. But not much closer. And consider the costs we continue to impose on ourselves in the interim: If the U.S. simply had the per-person health-care costs of Switzerland, which hosts the second-most expensive health-care system in the world, we would spend $3,000 less per person and save about $900 billion a year. Assuming we need to reduce deficits by about $4 trillion over the next 10 years, those savings would do the heavy lifting with about $5 trillion to spare.
Hard to Innovate
While our system grows more polarized and less predictable, our problems — mounting deficits, crumbling infrastructure, rising temperatures, stagnant incomes — are on autopilot.
It’s going to be hard to innovate our way out of the energy crisis with a broken patent system, flat research and development budgets, and an underperforming education system. We’re not going to be the best place to do business if our roads are thick with traffic and our broadband speeds lag behind those elsewhere in the world. We’re not going to get health-care costs under control if Republicans, having failed to repeal the health-reform law, refuse to allow it to be effectively implemented. We’re not going to attract the best talent from around the world if we can’t make it easier for the skilled and educated to settle in the U.S.
None of these problems is likely to balloon into a crisis anytime soon. (Interest rates won’t surge if we refuse a green card to the next Sergey Brin.) But over time, mistakes, missed opportunities and policy paralysis will lead to lower growth, higher deficits and a weaker country; then we’ll look back and ask, “What happened?”
The old theory was that the right answers to policy problems would, by virtue of seeming right, command enough consensus in Washington to clear the system’s hurdles. That may have worked well enough in recent decades, when the system was less polarized and the parties were far better at working together. It seems naive in 2011.
Other countries have had strong, polarized parties for longer than we have, using party-line voting to make effective governing majorities possible. In that sort of system, one side wins and implements much of its agenda. Eventually, the economy turns or the agenda fails and the other side gains power, reverses its predecessor’s excesses and implements its own agenda. And so it goes. Rather than governing through compromise, it governs by, well, governing, and letting voters judge the results.
The U.S. has never felt that it had much to learn from other political systems; even suggesting that there might be useful lessons abroad seemed borderline unpatriotic. But our dysfunctional political system just forfeited our sterling credit rating, and doubts about our governing capacity are roiling global markets. At this point, ignoring the system’s problems seems borderline unpatriotic.