THE PLANK JANUARY 2, 2008
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David Leonhardt has a very good piece in today's New York Times taking a look at the (relatively minor) philosophical differences between Hillary Clinton and Barack Obama on economic issues. Key takeaway:
The easiest way to describe Senator Clinton’s philosophy is
to say that she believes in the promise of narrowly tailored government
policies, like focused tax cuts. She has more faith that government can
do what it sets out to do, which is a traditionally liberal view. Yet
she also subscribes to the conservative idea that people respond
rationally to financial incentives.
Senator Obama’s ideas, on
the other hand, draw heavily on behavioral economics, a left-leaning
academic movement that has challenged traditional neoclassical
economics over the last few decades. Behavioral economists consider an
abiding faith in rationality to be wishful thinking. To Mr. Obama, a
simpler program--one less likely to confuse people--is often a
smarter program.
The two approaches can be viewed in part (if, perhaps, not entirely) as two sides of the same coin. People do respond to incentives--and one incentive they face leads them to avoid spending the time it takes to acquire the information needed to behave in a purely rational manner. As a result, "soft paternalism" (or "libertarian paternalism")--in which government helps structure the choices individauls face so that the default option is the "right" one--tends to look increasingly attractive. Apparently Obama has reached the same conclusion:
The problem with Mrs. Clinton's savings plan, according to the
Obama view, is that many people won’t save even when they are offered
subsidies to do so. After all, many workers who are eligible for 401(k)
matching funds don’t take advantage of them now.So Mr. Obama
would instead require companies to deduct money automatically from
their employees’ paychecks and place it in a savings account the
employee owned. Employees could opt out of the program. But if they did
nothing, they would end up saving money. It’s an idea that comes
directly from academic research showing that savings rates have jumped
when individual companies have adopted such plans.
One of this leading proponents (pdf) of this approach is TNR contributing editor Cass Sunstein, a friend and former colleague of Obama's at the University of Chicago Law School, so that may be where Obama picked it up.
--Josh Patashnik
4 comments
The glories of the rugged-individualist driven marketplace have given us such successes as the sub-prime mortgage crisis, the rape of California (remember that?), the current health care mess, airplanes reeking of urine as they sit on runways for hours, social security surplus for baby boomers given to rich people, etc.
I think it's pretty clear that dialouge of the last 20 years or so - with its think tank code words (soft paternalism) is so tired that it lacks meaning anymore. How about if we stick with what works and screw the verbage? Call it whatever you want, I think deducting 401K money eventually saves me tax money and makes pragmatic policy sense. That's good enough for me. It sounds like thoughtful governing to me, what a concept.
- Wandreycer1
January 2, 2008 at 3:52pm
I think you're comparing apples and oranges. In a contest within the Democratic party, Hillary has a kind of prior claim to the loyalty and affection (by way of her husband, probably) of blue collar voters that, at this point in time, exceeds Obama's. But once that contest is over, and if Obama wins it, those Democrats will most likely establish a new loyalty for Obama, since he will represent their party and their interests.
Outside the party, there is very little evidence to indicate that Hillary has any appeal to blue collar folks who consider themselves "Independent" or "Republican", and to the degree that those kind of voters are historically "Reagan" Democrats, they might actually have some serious and long standing issues with her. (rightly or wrongly...that's just the history she labors under.)
Obama, on the other hand, if he were the nominee, would not have that baggage to carry around with regard to non-affilliated blue collar voters, and to the degree that they are inclined this year to be philosophically attracted to the left, he's got the easy going, fresh faced, open minded, accessable liberalism that would be more likely to attract them than Hillary's polarizing reputation, history and style. Rightly or wrongly.
- vanwurs
January 2, 2008 at 3:59pm
ooops! I attatched that comment to the wrong post. (I blame in on the new TNR computer logistics. They suck in every way...long lags between submitting and publishing.) It should be on the "Why Hillary could win swing voters" post above this.
NEVER MIND.
- vanwurs
January 2, 2008 at 4:12pm
I like wandreycer's take, "thoughtful governing." My sense has been that that characterizes Obama's positions on a range of domestic issues, including education (teacher pay).
- stgla
January 2, 2008 at 6:07pm