More on Institutional Reform in the US: Our Greco-Japanese-Californian Future


Walter Russell Mead (above) has a thoughtful addition to the accelerating debate on reforming US institutions, even though I think he is wrong on every point. The end of this discussion is to slow the pace of US decline. China is coming on strong; the US debt and deficits are crushing. The argument says that America’s institutions are getting old and creaky; they are too overrun with interest groups to allow the general will to break through. No one, not even the president, can overcome the hyper-partisanship and break the gridlock in the name of the national interests. In a metaphor, the US is like an aged machine, slowly running down, increasingly in need of major overhaul, not just a tune-up.

While I certainly agree with Mead and the conventional wisdom that the US institutions are not aging well and that the US interest groups distort national politics, I just don’t buy it that fixing the Senate or restricting campaign cash is the answer. (Although both are good ideas.) The real problem is attitudinal:

The US population does not really accept that the US is on a fiscal crash course. Like the Japanese, Greeks, and Californians, we just refuse to see the looming reckoning. Americans are unwilling to reduce their expectations of government, but they refuse to pay more for it. The Tea Partiers are the best example of this oxymoron. They loathe the federal government, but they come from states and demographic brackets that benefit most from government redistribution. Who do they think has kept logging companies from clear cutting the inland Northwest? Who built the highways on which they can drive their pick-ups? Who subsidizes their retirement and health care so that they have time to go to Tea Party rallies? Who supports universities in the Rocky Mountain states that no one would otherwise attend or work at?

Money is made in the US in from suburban residents between the ages of 25 and 65, and some of it is redistributed as taxes. Part of the social compact is helping the elderly or rural populations, and we all accept that as a reasonable cost of building a just society. But the Tea Party bites the hand that feeds it. For all their complaints about ‘socialist tyranny,’ how many of its elderly members refuse Medicare/Medicaid/Social Security, how many of its Western/Plains States members refuse the massive federal assistance for agriculture, cattle, and land-use rights? Their stark ingratitude, and staggering ignorance (of how and where resources are generated in the US), tells you that real issue of American decline the radical expansion of the entitlement mentality.

So all these institutional fixes are just changes at the margin. The real trick is to show the US public the real cost of government and force them to decide how much or little they want. That would be an absolutely delicious moment. But of course it won’t happen, so our future is increasingly that of Japan, Greece, and California: big fiscal holes, gradual erosion of competitiveness, a craven political class unwilling to show the voters the hard choices that need to be made.

So my sense is that Mead is dancing around the real changes necessary:

1. Reviving Federalism

I don’t know why this helps. It just rearranges the deck chairs. I suppose we could force the states to pay more of their own bills, but remember that they already routinely get lots of resources from the Feds. They are already broke. Most states can’t balance their budgets without federal assistance: CA is just the worst of a thoroughly national trend already. In the last 50 years, the states voluntarily gave up their fiscal sovereignty in exchange for more dollars. So now we are going to reverse the flow? I guess, but I am not really sure how that helps. Americans expect a huge amount from the federal government, and most people aren’t federalist or states-rightists out of principled commitment, but rather based on which parties control which levels.

2. Congressional Term Limits

I don’t think this helps at all. In fact, the evidence from the states suggests the opposite. When legislators come and go quickly, interest groups (and staff!) peddling greater ‘knowledge’ gain even greater access. ‘Yeoman legislators’ has a nice jeffersonian ring to it, but in a highly technical, highly legalistic, highly complex bureaucracy, they will simply get lost, just like Jefferson Smith did in Mr. Smith Goes to Washington. In Ohio, term limits have been a disaster: they increased the constant campaign, adding a new ‘merrygo-round’ feature as legislators looked for ways to bounce around both chambers and then the executive branch bureaucracy, and empowered staff and Columbus-area think-tanks.

3. A bigger House of Representatives

Again, Mead’s working assumption seems to be that legislators ‘closer’ to the people will govern better. Again, it feels good; it invokes  Rousseau and Jefferson. But I am not sure how much this help. In fact, there is good evidence from Africa and East Asia that a certain amount of state distance from the cacophony of rent-seeking private interest groups improves state effectiveness. This is not an endorsement of the Beijing Consensus for dictatorship, only a warning that socially entrenching the American state even deeper in the population does not help the government made hard choices. If we change the mathematical ratio of voters to MCs, how does that compel making tough choices?

4. Unicameral  State Legislatures

This is a good cost-saving measure. It is less expensive, and reduces transaction costs unnecessary at the state level. But doesn’t this clash with number 1? You don’t need two legislative houses at the state level, if the politics at the state level isn’t really that important. But if you revive federalism, and state politics becomes more consequential again, doesn’t it provide a rationale for keeping a more lengthy legislative process?

5. More States

Yet more decentralization. As with the above, I do not see the casual relationship between a government ‘closer to the people’ and therefore more responsible. More states means more transaction costs, but I don’t see the benefit.

2 thoughts on “More on Institutional Reform in the US: Our Greco-Japanese-Californian Future

  1. Dr. Bob:

    GREAT POST. Good stuff on Africa. I will response later, in a rush. But good stuff.

    Sorry to v off but, what do you make of the accelerating coups trends a la 1980s in Africa lately, vis a vis the article?



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