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Why Voters Grew Tired of Cantor

Sunday, June 29, 2014

One can argue that, from the Tea Party point of view, if the establishment refuses to address the government-by-cronyism issue, then upsetting the table is the right move.

In the aftermath of Eric Cantor’s defeat, pundits are arguing over whether he lost due to his stance on immigration or to his addiction to cronyism. In fact, the two are inseparable, and presenting them as alternative explanations misses this basic point. Cantor’s pro-amnesty position on immigration fueled perceptions that he was a leader of a coterie of insiders more than a leader of Republicans. The winner in the Virginia’s Seventh Congressional District, David Brat, said that immigration is “the most symbolic issue that captures the difference between myself and Eric Cantor in this race but it also captures the fissures between Main Street and Wall Street.”

Most people do not decide which candidate to vote for based on who shares their opinion on the specific issues. They know that issues are complicated, and they remain rationally ignorant, believing that professionals who deal with issues full time will have a better perspective than they. In other words, voters mostly will accept Edmund Burke’s statement to the Electors of Bristol that “your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.” They will vote for whichever candidate shares their values and concerns (hereafter “V&C”) about the big issues — the economy; war and peace; health; education; law and order, and, at a deep level, humanity’s relationship to God and the infinite. A voter trusts that such a candidate will wind up supporting the voter’s real interests, even if he takes a position the voter would not have originally endorsed. If the voter is concerned about jobs, he will vote for the candidate who best communicates a genuine concern for the issue, not by assessing the details of some position paper.

If a particular issue does dominate a voter’s decision, it is usually because he has come to regard a candidate’s position on it as a hot button showing decisively that the candidate is or is not in tune with the voter’s V&C. 

It doesn’t get better than this a system in which politicians reassure voters of shared V&C by sabotaging the voters’ true interests.

The people of Cantor’s district fear immigration, for both economic and cultural reasons. In theory, Cantor could have crafted a message to reassure them that he shared their fears, would never sign off on anything that did not suit their long term V&C, and could be trusted to do the best possible in a complicated environment. (Burke did this badly, failing to link free trade with Bristol’s long-term benefit.)

But Cantor could not credibly create such a message because his status in the House leadership and his close ties with pro-amnesty business contradicted the idea that he shared the V&C of his district. So voters did not trust him on immigration, and of course his confusing stance on the issue then undermined trust on other things as well.

The insight that voters focus on V&C rather than discrete positions has considerable explanatory power.

It accounts for the limited value of specific proposals, and why good politicians refuse to get bogged down in detailed discussion of complicated issues that might create bad sound bites. It also accounts for incumbents’ ability to get away with lying about their records, as long as they pay attention to symbolic issues, and for the great power of tribal positioning.

Once a high level of cronyism is achieved, it is difficult to reverse. As interests pile on, the pressure on others to join in becomes irresistible.

Focus on V&C also explains the two-step that a good politician must master. To succeed, a politician must win not only a mass of voters but a share of the multitude of special interests, firms, and industries who have no V&C except their own cause or profit. Most of these are light in numbers of votes, but they have the money that is “the mothers’ milk of politics,” in the words of one-time California Treasurer Jesse Unruh, who made California pension funds into a major source of revenue for Wall Street underwriting firms in exchange for campaign contributions. Some interest groups, such as unions, public employees, and greens, can also provide the boots on the ground necessary for effective local get-out-the-vote efforts and the enthusiasm that leverages social media.

The system gives a big edge to the Democrats, who have no particular principles except for more government and more money to deserving groups. These principles are congruent with the interests of the dependent classes, the bureaucracies that serve them, the public and private elites who operate the system, an academia dependent on federal money, and many corporate looters.

To succeed, a politician must win not only a mass of voters but a share of the multitude of special interests, firms, and industries who have no V&C except their own cause or profit.

Even disasters favor the Democrats. The financial crisis provoked popular rage against the housing and financial systems and calls for action to curb them. The politicians could share these outraged concerns, and react with rules that would actually enrich the miscreants, who would gladly pay in return. The iron housing pentangle of builders, banks, community activists, realtors, and congressional committee chairmen is now more entrenched than ever, and the calls to discipline the big banks for their irresponsibility, arrogance, and ignorance paved the way for massive regulation that precludes effective competition and guarantees them against consequences for future failures. The insiders in these institutions understand the game, are content to be the butt of faux anger in exchange for real benefits.

It doesn’t get better than this — a system in which politicians reassure voters of shared V&C by sabotaging the voters’ true interests.

The Republicans have a harder time with the imperative to appeal to both the broad base of V&C voters and special interests. On taxes, the Republicans have made the link between benefits for targeted groups and pro bono publico, arguing that reductions for the rich and upper middle class prove the party’s dedication to the interests of working people, and it is not surprising that tax-cut rhetoric has a long chapter in the Republican catechism. 

Interests battle and log-roll to protect their precious pieces of statutory and regulatory turf, except that, unlike a real sporting event, they all get to win.

For conservatives, the definition of V&C has evolved. Rather than the usual jobs, education, and so on, their V&C concerns go deeper and now include dedication to free markets, light regulation, individual autonomy, respect for conscience, refusal to privilege victimhood, and the rule of law. These do not translate well into visible benefits for individuals, firms, or industries, and thus do not keep the vital dollars flowing into the coffers of the party, the independent groups, and the K Street lobbying firms where old donkeys and elephants go to get rich.

Some money comes from those ideologically committed to this conservative prayer book, but this group is not large enough to match the Democratic combination of billionaires, unions, greens, and public employees, nor is it as gullible as the business world in its willingness to shovel money to the consultant class (aka, “The Establishment”).

Cantor took on a hard sell to try to convince average Republicans that his votes for the Export-Import Bank, farm subsidies, sugar quotas, or other hold-your-nose bills were for their benefit.

Conservative leader Grover Norquist thinks that conflict between the establishment and the Tea Parties is not real, that the Tea Party value of cutting spending has taken over the Party. Others disagree, thinking that while the party’s spokespeople mouth the prayer book, too many votes on specific issues, including most subsidy programs, reveal a crony mind-set. Because they are unable to truly operationalize conservative values, the Republican Party of the establishment offers, according to Ben Domenech, “a bright smile, a firm handshake, and the policy agenda of the Chamber of Commerce.”

Every area of contemporary public policy is a Rube Goldberg nightmare created by cobbling together the demands of various interests, regardless of efficacy or consistency.

The GOP also offers two related arguments as to why conservatives should support it nonetheless. The first is, “the other guys are worse.” This is indeed a strong horse, and it has been ridden a long way. The second follows logically, and comes from a strategy described by Herman Kahn, the nuclear conflict strategist of 50 years ago, as “one of us has to be reasonable, and it isn’t going to be me,” so it has to be you, or the evil other guys will win. Thus the party grandees and corporate allies might sabotage conservative campaigns and then argue that Tea Parties must therefore support establishment choices because those are the only acceptable alternatives.

Over the past couple of elections, the Tea Parties have lost some winnable elections, but so has the establishment: “Tea partyers point to mainstream Republicans who lost Senate seats in Wisconsin, Virginia, North Dakota and Montana in 2012, as well as to two defeated presidential candidates.” Furthermore, some of the Tea Party candidates were salvageable, had the establishment not joined the hunting pack.

The “you must be reasonable” game has limits. Eventually, any repeated loser in the game decides to wreck things, perhaps out of angry spite, perhaps out of calculation that no progress can be made without upsetting the table and starting a new game. The establishment should recognize that it could blow the 2014 elections by being so obviously recalcitrant that the Tea Party stays home.

One can argue that, from the Tea Party point of view (there is no official view, so mine is as good as any), if the establishment refuses to address the government-by-cronyism issue, then upsetting the table is the right move. The fundamental problem is that hydra-headed cronyism is eating the country alive: The green energy boondoggles, which waste billions of dollars and cause the VA to spend money on solar panels while veterans die on waiting lists; turning energy policy over to an EPA captured by a bootleggers-and-Baptists coalition of radical enviros and corporate looters; the 2,280 federal programs of domestic assistance, each defended by an iron alliance of beneficiaries, bureaucrats, congressional committees, and lobbyists; and an Internal Revenue Service that turns itself into both a censor of political speech and a slush fund for the politically well-connected.

The iron housing pentangle of builders, banks, community activists, realtors, and congressional committee chairmen is now more entrenched than ever.

If it involved only money wasted on a few bridges to nowhere, the situation would be tolerable. There is a lot of ruin in a nation, and what’s a few hundred billion among friends? But the cronyism is now corrupting entire societal subsystems. Health expert John Goodman called Obamacare “a Rube Goldberg nightmare,” written “to appease every single Democratic constituency and every major special interest group.”  The process was like “going around a table asking each group what is the one thing they must have in order to support the legislation — the insurance companies, the drug companies, the hospitals, the labor unions, AMA, AARP, etc., [with] no one making sure that all the separate demands fit together in a sensible way.”

Goodman’s accurate insight renders futile any analysis of Obamacare in terms of its merits as public policy. It was not drafted with merit in view, and any appeal to good government is irrelevant to the debate.

Throughout the Obamacare controversy, health care stocks have done just fine; big Pharma, insurers, device makers, providers — all are setting new highs. The law was and is an arena in which interests battle and log-roll to protect their precious pieces of statutory and regulatory turf, except that, unlike a real sporting event, they all get to win.

Some money comes from those ideologically committed to this conservative prayer book, but this group is not large enough to match the Democratic combination of billionaires, unions, greens, and public employees.

Goodman’s point is actually a general law. Every area of contemporary public policy is a Rube Goldberg nightmare created by cobbling together the demands of various interests, regardless of efficacy or consistency. Housing policy and financial regulation, as noted above. The Keystone pipeline is best analyzed as a multi-player game involving labor unions, rich enviros, and Warren Buffett’s railroads, with the outcome depending not on actual energy policy but on who wins the favor of the king. The stimulus money went mostly to hire more government workers

Once a high level of cronyism is achieved, it is difficult to reverse. As interests pile on, the pressure on others to join in becomes irresistible. The values of the conservative prayer book are all public goods in that they establish rules and mechanisms designed to benefit all. Each individual firm has rather a different interest; the firm would like the benefit of these great rules and mechanisms, but it would also like special benefits. When a firm invests in the political system, its incentive is to put the money into getting the special benefits rather than supporting the public goods, especially as its competitors do so. Few resist, and the system turns into a death spiral as support for the institutions of the public good withers.

Finding a way to pull out of this spiral is not easy, and conservatives know this. They will cut their leaders some slack on the tactics, if they see that the leaders share their V&C over cronyism — but this is precisely where the Republican leadership falls short. It tries to sell the base on the unbelievable proposition that no problems in Washington exist that cannot be solved by electing the Republican establishment.

It is difficult to find a lever to move such leaders. One approach is to try to persuade them to focus explicitly on the needs of the middle class. The recent book Room to Grow promotes this view, but the fundamental nature of the effort is ambiguous. It can be seen as an effort to turn the V&C of the conservatives into operational recommendations, showing how the prayer book serves the needs of the middle class. Or it can be seen as an effort to add yet another set of cronies — “the middle class” — to the roster of worthy recipients of government largesse.

One of the lead authors, Ramesh Ponnuru, is clear that it is the first of these:

Brat's victory suggests that a lot of Republicans dislike a party elite they see as too tied to big business and too little concerned about Main Street. The public at large also dislikes these traits in Republicans. The conjunction of these facts suggests a political opportunity for the party in demonstrating that conservatism can directly benefit most Americans, not just those in boardrooms.

Less wonky is an appeal to the young in an ad just released in Louisiana by Generation Opportunity, which is “working to unite millennials as a voting bloc so we can finally put a stop to Washington’s generational theft schemes.” It shows a young woman wheeling Senator Mary Landrieu around a supermarket. Ignoring her cart-pusher’s objections, Landrieu fills the cart with junk, then tells the cashier that the young woman will pay the $800,000 tab, which represents the share of the national debt owed by each American. The conclusion is that the young woman pushes the stuff back to Landrieu, saying “pay it yourself.”

The system gives a big edge to the Democrats, who have no particular principles except for more government and more money to deserving groups.

In the end, the game is indeed that somebody must be reasonable, but with a twist. It is not reasonable for the leaders of either party to think that they can keep expanding government by cronyism, creating new interlocking empires for Rube Goldberg with every session of Congress. Sooner or later, the machine will freeze.

So the millennials and their sensible elders need to say, “somebody around here must be reasonable, and it is going to be us, and this means we are not going to be cozened by the continuing lunacy of the establishment(s). So get on board with our V&C or we will indeed turn over the table and demand a new game.”

Perhaps they can reach out to create new alliances as yet undreamt of.

The Right hates crony capitalism because it abuses the power of government, and the Left hates it because it creates corporate power. This week, Ralph Nader will appear at Cato along with conservatives of various tempers to discuss his book “calling for alliance of principled libertarians, conservatives, and progressives against a corrupt and overreaching Washington establishment.” It might work, except that the Left hates only the business dimension; cronyism in its other incarnations is just ducky, so any alliance would be transient.

If the result is an angry populist uprising and a move toward a third party, politics will not be pretty. But if the Republican leadership persists in ignoring the V&C of the conservatives, then that is the logical trend of events.

In the end, an uprising could be painful but productive, or just painful, but it would change the game and create new possibilities, and that may the best that can be attained at the moment. If it happens, it will be the fault of those who cannot accept that government by cronyism has run its course.

James V. DeLong is a graduate of Harvard Law School who lives in Red Lodge, Montana. He is the author of Ending ‘Big SIS’ (The Special Interest State) & Renewing the American Republic.

 
FURTHER READING: DeLong also writes “The Coming of the Fourth American Republic,” “America’s Crisis of Political Legitimacy,” and “Rhett Butler Comes to Washington.” Lee Harris notes “The Political Genius of Ted Cruz.” Andrew G. Biggs contributes “Crony Capitalism vs. Public Pensions.”
 

Image by Dianna Ingram / Bergman Group

 

 

 

 

 

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