Thursday, November 08, 2012

Future Generations, Hurricanes, Public Investment, and Single-Mindedness

 -- Posted by Neil H. Buchanan

In my new Verdict column, I return to a few of my favorite topics: public investment, generational justice, and the Romney/Ryan campaign's dishonesty.  I begin by describing a truly odd rhetorical move in a Romney campaign ad that ran during the final days before the election.  (Although I live in a Blue state, next to an even Bluer district, the local TV market covers Virginia, which was a key swing state this year.  Hence, I had the displeasure of experiencing a bombardment of advertisements for the last several months.  This was not Ohio, but it was bad.)

The ad was designed to combat Romney/Ryan's massive gender gap problem.  The campaign decided, characteristically, to rewrite Romney's history -- in this case, with regard to abortion, contraception, Planned Parenthood, and all of the craziness from the primary campaign.  Again, this dishonesty is not shocking, given the track record.  The unexpected move was to then say, in essence: "And Ladies, while we have your attention, we know you are mothers who care about your kids, so we'll take this opportunity to say again that government debt hurts your children.  Vote for us!"

By this point, it is hardly surprising that the deficit-happy Republicans were running as fiscal hawks.  That is old news.  Using that argument as a "women's issue" was the surprise.  We can now, I suppose, make the lazy claim that "it didn't work," given Tuesday's results; but of course, President Obama himself might well become a reborn deficit hawk any minute now.  So it seemed worth thinking through the issues once again.

A very large fraction of my Dorf on Law posts and Verdict columns deals with the notion of public investment.  Almost as many posts, it seems, have been dedicated to discussing justice between generations. Therefore, it would hardly surprise anyone that my big point in today's column was that Hurricane Sandy, and the highly effective federal response to it, demonstrate the need for more and better public investment.  The disaster response functions of the federal government -- at least, those that remained after Republicans in the House succeeded in cutting funds for such programs for the past few years -- worked very well, indeed.  Money well spent, saving lives and minimizing damage, and more than paying for itself.

Of course, this is also an argument for the large-scale infrastructure projects that are now back on the policy agenda.  We need good science -- that is, facts combined with intelligent ways to interpret those facts (both of which Republicans have been attacking for years) -- to figure out the consequences of inaction, the costs and benefits of action, and especially the tradeoffs of different kinds of action, for current and future generations.

If, for example, it initially seems implausible that building up defenses against superstorms is a better course of action than preventing those storms in the first place, one must consider the likelihood that the damage to the environment that has changed the climate could be irreversible.  It might even be true -- although I am skeptical of this possibility -- that we would now be better off spending money only to deal with consequences, rather than spending it on minimizing even greater damage.  The evidence should guide us.

There is plenty of scientific work out there on which to build, but I am not aware that anyone has yet put this together into a plausible set of cost/benefit analyses, combining the climate science with the economics of prevention and mitigation.  What we do know, without question, is that we will need a huge does of public investment, of various sorts.  And even if we decide to reduce future GDP growth by imposing, for example, costs on certain types of energy production, those costs can be borne by the federal budget, under appropriate circumstances.  Yes, some of the costs can be imposed on particular private parties (which is why the Koch brothers have spent so much money trying to discredit the science and buy short-sighted politicians, to save their coal businesses), but at the same time, we need to spend money on investments in alternatives.

When I have given academic talks about my work on intergenerational justice, I have typically described my life as a Keynesian macroeconomist as follows: Wake up, explain why my favored policies are better for future generations than are the policies of the anti-Keynesians, and go to bed.  To a surprising degree, that captures the essence of the argument for public investment.  The basic idea, after all, is entirely about future-oriented policy making.  Deficit hawks say that they are going to do good things by -- hey Ladies!! -- leaving children with less public debt; but that is a false economy.  Real living standards are what matter, and we have long been under-investing in the public assets that can increase living standards, even as government debt rises.

I am hardly the only person who noted the "children and grandchildren" aspect of the Sandy story.  I had never even heard of Connecticut's governor, Dannel Malloy, but I saw him in an interview last Tuesday night.  He said all of the things that I would have wanted a leader to say at that moment, appealing directly to the combination of hard-headedness and soft-heartedness that is the argument for public investment.  (Note: the previous sentence is a riff on the Keynesian economist Alan Blinder's 1987 classic book: Hard Heads, Soft Hearts: Tough-Minded Economics for a Just Society.)

It is, after all, a very generous thing to invest in the well-being of future generations.  Any given generation could use its resources for its own benefit, either by having fewer or no children, or not bothering to equip its children sufficiently to enjoy a happy future.  Teaching kids how to read is hard.  Teaching them to be good citizens is a pain.  They are all so childish!  That each generation does those things, and more, is truly a labor of love.  But it most definitely is laborious, and expensive.  In turn, this means that the idea that public spending projects are self-indulgent wastes of money gets it completely wrong.

All of these arguments are, as I noted above, in one way or another found in a very large fraction of my writing.  This is true of my academic writing as well, not just the on-line work.  The Sandy story, therefore, caused me fairly to shout at the TV: "Of course it's about public investment in infrastructure!" I had to wonder, however, whether this was one of those situations in which I had become so focused on public investment that I would look for any excuse to justify doing more of it.

After all, there is a core of Republicans and conservative economists for whom the answer to everything is: Cut taxes!  Was I just as reflexively calling for governments to fire up the cement mixers, because I am always looking for any excuse to do so?  I concede that this is possible, but I do not believe that it is the same thing.  To listen to conservatives and Republicans, after all, the tax cut elixir is the cure for all ills.  Terrorist attacks?  Cut taxes!  Going to war?  Cut taxes (on capital gains, according to former House leader -- and ex-felon -- Tom Delay.)  Economy too strong?  Cut taxes.  Economy too weak?  Cut taxes.

It is true that one could find a large number of situations in which people like me have called for more infrastructure spending, and for more public investment in general.  Each of these situations, however, is one in which the problem at hand would actually be made somewhat better by spending public funds on investment projects.  The Sandy aftermath is simply a situation in which the argument for more public investment is an especially easy case to make.  Similarly, the years since 2008 have been times when the economy has needed a boost from deficit spending, so this has been a long series of wasted opportunities, when the federal government should have been saying: We need to spend anyway, so why not do it in a way that benefits both current and future generations?

Another way of saying this is that there is a point at which enough is enough.  That we are not there yet, and that it makes sense -- year after year -- to remind people that we are still under-investing, merely proves that the problem has not gone away, not that this is a one-size-fits-all remedy.

Indeed, as I have argued elsewhere, "doing everything that we can for the children and grandchildren" is itself an inappropriately narrow approach to policy.  Yes, investing in the future is important.  But so is dealing with real problems today.  Pretending that we cannot do appropriate amounts of both is the biggest failing of politicians in both parties (led by the Republicans, but with Democrats too easily following) for the past generation.  Maybe the superstorm and the election results will start to change that conversation for the better.  That, in any case, is my personal version of how to feel a renewed optimism about Hope and Change.

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