Stubborn Facts

Gene Sperling, director of the White House’s National Economic Council, got in some hot water over the weekend for suggesting that entitlement cuts were on the table in a budget deal. He’s walked back his remarks since and, to be fair, it’s always hard to figure out what Sperling means. On the other hand, for several years his boss has snuck plugs for cutting benefits into any number of speeches, even Convention stem winders where they never fail to break the rhetorical momentum. It’s hardly unreasonable to assume that the administration not only buys into Centrist commonsense on this issue, but thinks that it’s worth alienating the Democratic base to try to act on it. If that’s true, Obama and his people have a lot of company, much of it not on the right. The necessity of reigning in Social Security and Medicare is always treated as something all reasonable people agree about by the reporters and talking heads of CNN and the Washington Post and other moderate media outlets.

If economics were a science like physics or astronomy or biology, it could be that the imperative need to cut entitlements was a natural fact like heliocentrism or the evolution of living things that only schizophrenics, hayseeds, and religious fanatics still dispute. Economics, however, has an irreducible normative component. You can’t define good policy without stating, or more often, implying but carefully not saying, for whom the policy is good. It is this issue upon which the desirability of entitlement cuts depends, not some fact of nature or mathematical theorem. The arithmetic becomes relevant on the other side of the political question of who matters. So what does seem to be true is this: we can't maintain and increase the current high levels of income and wealth inequality without cutting entitlement benefits. If the government of the United States were conducted on the basis of promoting the general good, on the other hand, one would come to very different conclusions about entitlements. There is no serious problem with Social Security—nobody should have to live on cat food because of Alan Simpson’s innumeracy— and what gets featured as a problem with Medicare is really a problem with an absurd health care system that costs far more than it has to.

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Like parentheses, errors come in pairs. The Soviets just knew that a command economy would outperform any market economy and drove their regime into the ground trying to prove it. We've bought the opposite error of thinking that markets automatically outperform government agencies even in areas like pensions, health care, and education where experience has long shown they don't and that bureaucracies are more efficient—very few companies have ever been run half as smoothly (or cheaply) as the Social Security Administration. Thus there's a certain symmetry between Brezhnev and Ted Cruz...

Unfortunately, it isn't just the Republicans or the Conservatives who are still trying to make markets do what they can't do. It’s also commonsense for the technocrats who dominate the Democratic party; and just as the would-be reformers of the Soviet economy thought they could tweak the system without challenging the faulty assumptions upon which it was built, the administration and its technocrats are mostly just compassionate Reaganites for whom the market is magic. Of course part of the reason the ACA is so complex is the dysfunctional character of American politics, but it’s a dodge to blame it on the Heritage Foundation. Obama and his cohorts may have different ethical priorities, but the New Democrats, like New Labor in the United Kingdom, have the same economic theology as the Republicans and that’s a big part of the problem.   

Francis Spufford wrote a wonderful novel, Red Plenty, about the decline and fall of the Soviet economy. It tells the story of how well meaning and intelligent people failed to make water run uphill and overcome the fundamental weakness of demand economies. One of these days, somebody will have to write a novel about how our society suffered because the economic dogmas of Neoliberalism just couldn’t be made to work.   

A Memorable Fancy

Content analyzers, the statistical computer programs the NSA and Amazon use to identify terrorists and customers, can’t actually read, which is why bemused dentists from Cleveland wind up on the no-fly list and I get peppered with ads for books on Biblical exegesis. The ways that such substitutes for human intelligence fall short shouldn’t keep us from recognizing the ways in which they also exceed human intelligence. Insight is more glamorous than method; but where being right is more important than being clever, in medical diagnosis, for example, it’s often second best. There’s an irony in the triumph of big data over consciousness because it echoes an earlier episode in which consciousness first demonstrated its advantages over instinct. Just as understanding things wins many battles against mindless number crunching, hunches and feel often outperformed and continue to outperform reasoning, at least in the moment. Still, John Henry and Kasparov eventually lose. I actually had a dream about all this last night, but in the dream there was one further wrinkle. I conjured a cognitive power that emerged on the far side of brute AI and exceeded its reach as far as it will eventually exceed ours. Of course such a thing would be perfectly incomprehensible to us—you might as well hope that an especially intelligent bowling ball would get a joke—but it was somehow consoling to imagine we’ll have a better successor than Watson or Sky Net. Maybe it’s like Westerns. There’s always a faster gunslinger out there.