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Elites and Intellectual Failure

I agree mostly with Matt Yglesias' diagnosis of the scariness of American political institutions, and the even greater uneasiness that European institutions inspire. I want to quibble with this graf however:
Think seriously about it and you'll see that it just can't be that everyone in Frankfurt and Brussels and Berlin and Madrid and Athens is incredibly stupid. Rather, the eurozone has blundered into a set of institutional arrangements that can't process the issues correctly and the rest of us can just stand and watch the wreckage unfold. Our problems are completely different in origin but similar in some important respects. Luce's book is the story of a United States that's suffering from a variety of fairly well-known problems that intellectually seem far from unsolvable. And yet our political system, for some fairly profound reasons, just isn't working on solving the problems. Instead, it's leaping toward another terrifying and pointless debt ceiling showdown even as political punditry remains excessively focused on personality conflicts rather than the structural roots of this dysfunction. It's time to start thinking.
Again, I think that this diagnosis of institutional failure is correct, and also that solutions to our problems are intellectually pretty easy. However I think the analysis of that failure has to include some room for straight-up inability to correctly understand things (for whatever reason, be it ignorance, stupidity, or some kind of prejudice). Check out this little segment with Paul Krugman and a couple British conservatives:



(As an aside, I do enjoy how the TV norms in Britain seem to lean more towards actual, back-and-forth discussion, rather than a bunch of hacks shouting carefully crafted talking points at each other.) It was striking to me how unable the conservatives were to actually engage with Krugman's points. He kept trying to separate the idea of being in a depression from other points about debt, deregulation, and the size of the state, and the conservatives simply didn't get it (see especially about 6:30). I'm reminded of 2010-2011, where Obama and his team made a "pivot" to concentrating on debt and deficits that was, from an intellectual or political standpoint, utterly boneheaded.

The whole political discourse these days is strongly reminiscent of the Great Depression years. Herbert Hoover presided over three years of disastrous economic failure, but went round saying things like:
Nothing is more important than balancing the budget with the least increase in taxes. The Federal Government should be in such position that it will need issue no securities which increase the public debt after the beginning of the next fiscal year, July 1. That is vital to the still further promotion of employment and agriculture. It gives positive assurance to business and industry that the Government will keep out of the money market and allow industry and agriculture to borrow the monies required for the conduct of business.
It wasn't just an institutional problem with Hoover. All the institutional incentives were lined up for him to fix the depression; he didn't, and as a result was utterly crushed at the polls in 1932. He was captured by an ideology that prevented him from operating in his own political self-interest. The same goes for most of the political elites in Europe, and Obama to a lesser extent. (Hoover deserves a bit more of an excuse, I suppose, in that there wasn't much of an economic consensus back in his day, but given how conservatives are prone to quoting his ideas nearly verbatim today I reckon even if Paul Krugman had been around back in 1930 Hoover would have done the same things.)

Being young and poor and therefore utterly divorced from the elites in this country, I can't say for sure what's happening here, but I have a suspicion that there is a rarefied culture among the elite (as Digby would call it, the Village) which basically makes them stupid. Elites are mostly very wealthy, which usually brings an enormous dose of self-regard and arrogance, as well as the belief that because they themselves became rich doing things in the economy, they therefore understand how it works. It's small and very insidery, and peer pressure and groupthink can make espousing out-group principles socially problematic. All that together and we have an elite culture which has a strong tendency to settle on simple, intuitive, emotionally appealing economic ideas like Hoover's, while excluding people like Krugman as "unserious" or unwilling to "make tough choices." That, maybe, is how you get career politicians doing the electoral equivalent of shooting themselves in the face.

So any institutional design should take this tendency into account, and somehow provide a way for political elites to be able to correctly predict the consequences of their policies. For more on elite culture, and how it develops, I very highly recommend Chris Hayes' new book Twilight of the Elites, available soon.

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