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Democracy & the Information Problem

Julian Sanchez commenting at the Daily Dish on why most political reporting is about the horserace and not about the policies politicians support: . . . the ratio of horse-race…

Julian Sanchez commenting at the Daily Dish on why most political reporting is about the horserace and not about the policies politicians support:

. . . the ratio of horse-race to policy coverage may be a rough gauge
of our cynicism about the political process. If you think of American
democracy as a fundamentally deliberative enterprise—citizens gathering
in a great Norman Rockwell painting to reason together about the common
good—obviously it's going to be important for citizens to be well
informed about the details of policy so they know who to support, what
to say when they write their senators, and so on. If that's all a lot
of crap and there's really just a big mud wrestling match between
interest groups to see who gets to turn the crank on the sausage
machine, you may as well forget about the sausage ingredients and watch
the bout.

Sanchez's point is that most people don't care about the policy details
because their mind is already made up on which side of the debate they
align. They don't care about the policy so much as they care about
their side's winning. This is another aspect of Frank's What's the Matter
with Kansas
thesis–people will vote for politicians who implement
policies that hurt them because they care more about winning the culture war. Rational discussion about policy becomes impossible. It only matters what positions your team takes. In the same way that we cannot debate,for instance, abortion policy, healthcare reform has become the same kind of thing. The policy impacts on middle-American conservatives don't matter; it only matters that the movement conservative team is against it.

But there's another layer to this that is laid out clearly by Russell Roberts in his essay "Pigs Don't Fly" (h/t Patrissimo):

Bruce Yandle uses bootleggers and Baptists to explain what happens when a good cause collides with special interests.

When the city council bans liquor sales on Sundays, the Baptists rejoice—it's wrong to drink on the Lord's day. The bootleggers, rejoice, too. It increases the demand for their services.

The Baptists give the politicians cover for doing what the
bootleggers want. No politicians says we should ban liquor sales on
Sunday in order to enrich the bootleggers who support his campaign. The
politician holds up one hand to heaven and talk about his devotion to
morality. With the other hand, he collects campaign contributions (or
bribes) from the bootleggers.

If that's all there was to Yandle's theory, you'd say that politics makes for strange bedfellows. But it's actually much more depressing than that. What often happens is that the public asks for regulation but inevitably doesn't pay much attention to how that regulation gets structured. Why would we? We have lives to lead. We're simply too busy. Not so with the bootleggers. They have an enormous stake in the way the legislation is structured. The devil is in the details. And a lot of the time, politicians give bootleggers the details that serve the bootleggers rather than the public interest.

I wish I could say something smart about how to subvert this fundamental dynamic in our democracy, but when you combine the Frank effect (ordinary folk  voting against their practical interests) with the Yandle effect (special interest lobbyist making sure pols vote in their interests), you're virtually guaranteed to get bad public-interest policy, and it's a real question about whether the country is governable. 

There are many public-interest groups that try to provide this kind of monitoring of policy details, but none has enough credibility and authority to cut through these effects. And even if people are informed about how the bootleggers have hijacked the process, as so many are aware that the insurance industry has hijacked this round of health care reform, what can they do about it? The politicians will respond to whoever dangles the biggest carrot or wields the biggest stick, and the system is set up in such a way as to insure that the bootleggers always have the biggest carrots and sticks. And the system cannot be reformed if such reform depends on the votes of the politicians whose incentives derive primarily from the bootleggers.

If this healthcare reform works out, I will have my faith renewed in our democracy. But if the Dems, with all their advantages and the broad public support reform enjoys, can't deliver and we get a bill which will in its essentials benefit the insurance industry the way the Bush Medicare drug prescription bill benefited the pharmaceutical companies, then we have to conclude that the United States has become a crony capitalist regime in substance, and a ceremonial democracy in form– the way England is a ceremonial monarchy. The power shift will have been completed. As in England it is no longer with the monarch, in the U.S., it is no longer with the demos. Life goes on, but we should no longer deceive ourselves about what we've become.

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