The Persistence of Dumb Narrative

As we enter this election year, and countless political slogans and buzzwords prepare to bombard our psyches, it’s important to examine the power of narrative in framing our national political conversation. Narrative is what makes “wealth re-distribution” a political virtue in some political cultures and a cardinal sin in others; it is what determines whether the top 1% of wealth holders are seen as “job producers” or greedy “fat-cats”; it is what imbues meaning to phrases like “Climate change,” “social justice,” and “entitlements.”

As an opening salvo in this year’s political verbiage battle, US News & World Report issued a doctrinaire reassertion of the free market, limited government narrative. Responding to President Obama’s income-inequality-centric Osawatomie speech, author Stephanie Slade concedes that wealth and political power is unfairly concentrated in the hands of the few, but argues that Big Government is the culprit.

“What people often fail to recognize is that the state is itself the tool by which the haves keep the have-nots without…It is only by intervening to choose winners and losers—by trying to substitute the judgment of the few in positions of power for the judgment of the many in an open marketplace—that a government cedes influence to those with the most to spend.”

This is the rallying cry of the Free Marketeer narrative; well intentioned yet naive progressives want to reduce inequality through forced redistribution, but  aggravate the problem by creating more opportunities for the powerful to exert their influence. For the sake of argument, let’s assume this narrative is correct about the naiveté and quixotism of liberal socioeconomic philosophy, but do Free Marketeers offer a more pragmatic story, one based on fact instead of fancy, highfalutin’ theories?

In the Free Marketeer narrative, productivity and wealth go together like bagels and lox.

“Within a free market, inequality comes almost exclusively from one place: unique individuals’ differing levels of productive ability…The more productive you are, the more wealth you can accrue, and the less productive you are, the less wealthy you’re likely to be.”

But can one honestly argue that investment bankers are so much more productive than teachers or firefighters as to justify their vastly different incomes? Free Marketeers seem to forget that the market often works whimsically, rewarding great wealth to some and a piddling to others based not on their productivity, but on mere happenstance.

John Cassidy of the New Yorker offers a stark rebuttal to the Free Marketeer narrative, arguing that Wall Street is essentially the story of obscenely wealthy institutions engaging in activities with no productive value:

“In effect, many of the big banks have turned themselves from businesses whose profits rose and fell with the capital-raising needs of their clients into immense trading houses whose fortunes depend on their ability to exploit day-to-day movements in the markets…Some recent innovations, such as tradable pollution rights and catastrophe bonds, have provided a public benefit. But it’s easy to point to other innovations that serve little purpose or that blew up and caused a lot of collateral damage, such as auction-rate securities and collateralized debt obligations. Testifying earlier this year before the Financial Crisis Inquiry Commission, Ben Bernanke, the chairman of the Federal Reserve, said that financial innovation “isn’t always a good thing,” adding that some innovations amplify risk and others are used primarily “to take unfair advantage rather than create a more efficient market.”

The persistence of this narrative lies not only in its conception of productivity as an infallible mechanism of resource allocation, but also in the allure of its holy grail­–the perfectly competitive market.

“If the economy were allowed to function organically, there would be little reason for people to waste resources on ‘high-priced lobbyists and unlimited campaign contributions…wealth would cease to give an unfair political advantage to those who possess it, and inequality would once again be a function of work ethic and ability alone.”

In our political discourse, there are very few utter illusions masquerading as facts more preposterous than this. Even introductory economics textbooks allow that a perfectly competitive market exists only in theory. And as for the assertion that without any regulatory interference “wealth would cease to give an unfair political advantage to those who possess it, and inequality would once again be a function of work ethic and ability alone?” I can think if no more quixotic or highfalutin’ theory.

The reality is that holders of wealth and capital have virtually unlimited power to design the rules of the game. The regulatory authority of the state is the only effective counterbalance to the confluence of wealth and power. Factors like imperfect information, monopoly, barriers to entry, collusion and fraud are intractable parasites in the body economic, allowing wealth to perpetuate itself, and divesting the average citizen of equal leverage.

The reason the Free Marketeer narrative maintains its persuasive power is due to our proclivity for historical amnesia. Never having lived in such a reality, people are free to romanticize and aggrandize, elevating an ideology untested in their lifetime to an almost divinely ordained status.  But as we enter a politically divisive year, fraught with challenges to the progressive vision of America, let us not forget the historical reasons behind the creation of the social safety net and the poverty of blind narrative.

The Right’s Trump Card

Like an ominous church bell tolling the Day of Reckoning cometh, we hear incessantly in the polls that Democrats are due for a walloping in the November mid-term elections. Anti-incumbent fever has reached epidemic proportions and disgruntled Americans are all too anxious to send packing the party holding the reins.

Whether this scenario will come to pass though depends heavily on the sway the conservative narrative holds over the national political discourse.

Consider the remarks made by Senate Minority Leader Mitch McConnell regarding Health Care Bill in November 2009:

“…this bill doesn’t reflect the views of the American people. Americans have been asking us to cut costs, not raise them. They want the kinds of step-by-step reforms that would actually make a difference, without bankrupting the country and without further expanding the role of the government in their lives. Americans don’t want this bill to pass. Instead, they want us to earn their trust with the kind of commonsense reforms Republicans have been talking about all year… Americans also want us to address the rampant waste, fraud, and abuse in the current system before we create an entirely new government program. And yet Democrats don’t seriously confront this problem in their 2,074 page monument to more government, more taxes, more spending, and more debt.”

Or the infinitely more absurd proposal to repeal the Financial Reform Bill made just this month by Republican Conference Chair Mike Pence:

“We need to repeal this new Big Government program and replace it with common sense reform that protects taxpayers from bailouts, helps put Americans back to work and deals with Fannie Mae and Freddie Mac.”

Now, if I may be so audacious, I believe what you have just read is the most powerful  argument in our political discourse today. In 2001 you beheld the power of “they hate us for our freedom,” just 20 months ago, you ooh-ed and aah-ed at the monumentality of “yes we can!”, now, the “Big Government” narrative has captivated the national political imagination.

I don’t mean to suggest that the Republican trope is illegitimate, for as humanity’s experimentation with authoritarian government has time and again shown, government is a dish best served in moderation. But so is this narrative; Republicans have utilized the Big Government narrative as sort of a dark, foreboding cloud that stifles all debate and casts a shadow on any measure or bill, no matter how necessary.

Like watching the masterful trickery of the adept svengali, a ask myself in awe and admiration; “how has it been possible for the Republicans to suffer no discernible loss of support after blocking unemployment benefits for a month, while the Democrats are literally hemorrhaging poll points after passing TARP and the stimulus package?”

The Republicans seem to have a set of weighted dice; blocking unemployment benefits in the aftermath of an economic recession and during a time of 9.6% unemployment is just about the least popular thing I can imagine, next to stealing lollipops out of the mouths of babies.

But the Democrats’ main flaw has been a singular failure to construct a convincing narrative of necessity behind the massive bailout, and an equal failure to recoup any points with the “it could have been a lot worse” narrative behind the lukewarm success of the American Reinvestment and Recovery Act. Meanwhile the Right miraculously managed to suffer no love loss in perpetrating an act that would have ended with buckets of tar and bags of feathers given any other circumstance—but what is more, actually gained political points by criticizing the stimulus package as not sufficiently effective, which they didn’t support in the first place!

In less exasperated tones, Perry Bacon Jr. of the Washington Post writes along the same lines,

“Emboldened by sagging approval ratings of the Democratic-controlled Congress, Republicans almost unanimously opposed a bill to overhaul the financial regulatory system that President Obama signed into law; they are against a measure to increase the disclosure of campaign spending by corporations; and they’ve largely eliminated the chance of passing a series of measures Democrats say could help the economy…Republicans say polls suggest that they can oppose all of these initiatives by casting them into a broader critique of Democrats increasing the size of government and the budget deficit, even if their bills are individually popular with the public. “

The  genius of Right’s narrative lies in how its ideological rigidity effectively ensures its self-perpetuity; with the “Big Government” trump card, Republicans are able to construct a favorable foundation upon which to support this narrative:

“The opposition has left Democrats fuming. They say Republicans complain that Congress should focus more on the economy but oppose every measure Democrats take up to create jobs. In the Democratic view, the GOP is cynically blocking measures to reduce unemployment so they ensure an angry electorate this fall who will want to vote out incumbents, most of whom are Democrats.”

Thus, ladies and gentleman, we find ourselves deeply and inextricably entwined in an absurd political discourse; the West has undergone worst financial crisis since the great depression and Congress can’t manage to pass anything but token financial reform. The worst environmental disaster in the nation’s history is still mucking up the waters of the Gulf of Mexico and we can’t even get energy reform onto the floor of the Senate. The Democrats have the largest majority in Congress in decades, but the Right is somehow still writing the script of the national debate.

How has the Right managed, with seeming ideological consistency, to criticize TARP while advocating for the Bush Tax cuts? Don’t these two distributive schemes benefit the same economic class? And aren’t the Republicans wedded to the idea that those who pay the most taxes and produce the greatest wealth in society deserve the greatest portion of the social fruit? How has the Right been able to denounce TARP as bailing out Wall Street at the cost of Main Street while at the same time opposing broad reforms such as the creation of a consumer protection bureau, minimum capital restrictions on banks and regulations on proprietary trading, thus shifting the consequences of reckless mistakes of the financial industry onto the biggest players on Wall Street? How have the Republicans rallied so vociferously against the evils of pork-barrel spending while at the same time lauding the Supreme Court‘s decision in Citizens United vs. FEC, making direct corporate political campaign contributions? Aren’t the two begotten from the same mother of money and corruption in politics?

This is the current American political discourse; one over which the seemingly infallible narrative of the Right holds power—the power to set its own premises for its predestined conclusions, the power to reject certain proposed measures that are in ideological concord with the Right’s political philosophy and finally, the power to conceal the massive cracks in its ideological foundation.

In the trial of Socrates, the gadfly of Athens was charged with making the weaker argument appear the stronger. Perhaps its time Socrates’ accusers had their day in court.