US: Big Problems Require Long Term Solutions The political process mostly rewards quick fixes

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WASHINGTON – America is slowly getting into its political campaign mode. The 2016 presidential elections are getting closer; even though, for the moment, only the Washington based media and some specialists are paying attention.

A huge disconnect

Beyond the obvious commentary about who is up or down according to the polls, the main problem with these elections is the disconnect between the issues that need to be addressed –mostly complicated, systemic problem such as tax reform and entitlement reforms– and a “smart apps”, “quick fix”, culture that expects politicians to come up with clever new ideas, supported by high-tech tools, that will easily solve all problems at almost no cost.

Well, guess what, there is no such thing. America’s serious ailments –and they are serious– are rooted in slow moving systemic crises, themselves the outcome of layers of bad policies carried out over decades. Bad policies in turn are the outcome of bad or at least misguided ideas.

Changing policies is predicated on changing our understanding of what it takes to improve certain conditions, (for example: “how to reduce poverty”), not to mention societal expectations about benefits, entitlements and costs. A lot of work will be necessary to change entrenched mind sets. Bottom line, because of all this, there are no quick fixes.

Here are some of the big ticket items.

Improve public education

In America we have now a gigantic public education crisis that can be addressed only by radically transforming everything connected to public schools, beginning with the role of teachers’ unions, the qualifications for being a teacher and the need to create real incentives that will attract bright young people into the teaching profession. Too many bad or mediocre teachers equal poor education.

Health care crisis

The US health care system is a stupendous mess featuring a plethora of private providers motivated by profits whose activities are however constrained by a web of complicated federal and state mandates and costly regulations. In all this there is zero incentive to reduce costs by promoting prevention via “wellness” education. (There is no money to be made when people are healthy). The horrible outcome of all this is mediocre care, incomplete coverage, and ridiculously high costs –by far the highest in the developed world. In a partial and imperfect way, Obamacare addressed the problem of the uninsured. Everything else stayed almost the same.

Tax reform

Then we have a monstrous federal tax code that nobody understands and that objectively discourages business creation. However, simplifying it means open war with thousands of special interests that over many decades managed to insert sector specific exclusions, rebates, and subsidies. They are all ably represented by armies of well paid Washington based lobbyists. Simplifying the tax code, as a minimum, entails defeating these armies.

Entitlements need to be revised

Add to the list the pillars of the US welfare state: Social Security, (income support for the elderly), Medicare, (health care for seniors), and Medicaid, (health services for the poor).  These programs were designed decades ago (Social Security was introduced by FDR) by well meaning policy-makers who believed that it was appropriate and humane to create a social safety net that would support the elderly and the poor.

However, these programs have been expanded over time. There are now more benefits and more recipients, while America has experienced huge demographic changes –fewer births, while older people live longer–  that contributed to jack up the cost of the welfare programs while shrinking the base of those who pay into them.

Simply stated, the amount of taxes collected from a reduced pool of active workers soon enough will be unable to cover the costs of benefits paid to larger numbers of elderly people who live much longer. However, the very notion of proposing anything that may even remotely look like benefits cuts to seniors is deemed to be political suicide.

Funding for basic science

And finally we have the need to fund robust R&D programs in basic science. In the past the Federal Government did a lot. Now it does much less. The private sector is reluctant to fund open-ended research that is not tied to commercial developments.

And yet it was precisely this open-ended research that in the past created new fields of knowledge that were later on exploited by the private sector. This R&D spending used to be one of the pillars of US competitiveness.

Pain now, benefits later

Anyway, these are the main items that should be on any politician’s“to do list”. The problem is that we are talking about engineering complicated systemic transformations whose benefits, if all goes well, will become evident decades from now. And this is anathema for all politicians seeking elected office.

The system’s rewards and punishments are predicated on promising and delivering quick results that those who voted for you can see and touch almost immediately. You have to promise and deliver something tangible “now”, and voters need to see the benefits they got from you before the next election.

And it is precisely this general predisposition to make too many promises with costs that grow over time that got us into trouble.

The system rewards quick fixes 

The solutions to the systemic problems outlined above rest on long-term, carefully arranged reforms that postulate a large, bipartisan political consensus.

And here we see the disconnect. We have a political system with frequent elections (every two years for Representatives) that incentivizes politicians to deliver tangible benefits “now”. Besides, the current American political climate is fiercely partisan and ideological. This makes it almost impossible to form the large coalitions we need to create a national consensus around a big reform agenda.

On top of that, our “twitter culture” rewards disproportionately those who can come up with clever, catchy one-liners that go viral only because they sound good. In the end this is mostly about manipulation and obfuscation. But the mastery of communication tools does not add anything to any serious policy debate.

Governing is predicated on consensus 

Sadly, smart messages are not enough. The good use of social media may be enough to get someone elected; but it does not help in governing a country of 310 million people.

The problem is that, without a serious debate about the systemic crises outlined above, the critical issues will not be addressed, and nothing important will happen –no matter who gets elected president in November 2016.

America needs a broad-based coalition. We need a large consensus in which most of us agree that serious advances imply short term pain for benefits that will become obvious a decade or more from now.

In order to return to sustained growth, higher productivity, more innovation and ultimately greatness, America will have to address several systemic problems for which there are no quick fixes.

A clever Twitter message simply will not do.

 

 

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