COMMENTARY
 by Jared Bernstein |
It is, of course, impossible for politics to be anything but deeply political right now.
It’s all positioning, framing yourself and your opponent, capitalizing on his gaffes while walking yours back, presenting plans but avoiding key details. And with the media in full horse-race mode, a substantive analysis of the candidates’ positions may be nigh impossible.
But I’m going to try anyway.
Despite what we hear, the main argument isn’t really about jobs records, the role of private equity, who best understands the economy, or how much better or worse things would be if Congress would cooperate. Yes, those issues will be in the mix until Election Day. But they likely won't change many minds.
No, the main argument is about the role of government in our lives. Neither candidate believes that government should be a dominant force—both stress the primacy of the private market in a capitalist economy. Both recognize that absent market failures, the incentive structure of the private sector provides the best opportunities and allows people to make the best choices, in the sense of promoting the most well-being for the most people.
But the President sees more market failures, market barriers, inherent instabilities, inequalities and inefficiencies than does Governor Romney. As a result, he sees more of a role for government. He has taken to citing Lincoln on this point, as he did yesterday: “Through government we should do together what we cannot do as well for ourselves.”
I doubt Mitt Romney would disagree with that. But he would draw the "Lincoln Line" in a very different place.
For example, Romney has been extremely critical of the stimulus package (he said in Thursday’s speech it “didn’t work,”), and, as The New Republic’s Jonathan Cohn notes, would not try to temporarily replace the lost demand in a recession—a clear market failure—through Keynesian stimulus.
When it comes to health care, Romney does not view the “individual” market—where people shop for health insurance on their own as opposed to as part of an employer or government group—as part of the problem. He views it as part of the solution, and would provide individuals with a voucher to shop for coverage. He would not have rescued GM and Chrysler.
Romney does not see a federal role for safety-net programs like unemployment benefits or nutritional programs—he would turn these over to the states. That loses their counter-cyclical function and makes them less effective, but it’s consistent with his stance against trying to mitigate recession with government programs. Similarly, budget cuts he has backed would likely result in cuts to financial aid and Head Start, according to an analysis (pdf) by my organization, the Center on Budget and Policy Priorities.
This is the agenda of someone who, in reference to that quote from Lincoln, envisions more people doing more things for themselves than they do now or than they’d do under President Obama’s vision.
In the agenda the President talked about Thursday, for example, government programs should help stimulate job creation in periods of high unemployment. That’s also why he rescued the auto companies, believing that absent government action at this time of credit market collapse (another market failure), no one other than the federal government would supply the needed capital.
Where Obama draws the Lincoln Line, market barriers like poverty block children from access to education. Left to their own devices, private firms will under-invest in developing technologies like advanced batteries, and no firm could single-handedly undertake the R&D and interstate coordination of the kind of updated energy-transmission grid we need. The market will fail to provide adequate, affordable health coverage. Financial markets can become unstable, exposing taxpayers to large losses.
The implications of these different visions for government have been getting a lot more attention than the visions themselves. If you believe in a lot less government, you can cut a lot more taxes (at least you can if you’re really serious about all those spending cuts—otherwise, you’ll just have much higher deficits). And vice versa—if you plan to offset large market failures, like millions of uninsured, you’ll need more revenue. So the campaign debate will continue to scrum around with tax cuts and deficits and fiscal cliffs and budget baselines.
But it would be better if we could get a lot deeper into this fundamental question of government’s role, because that’s the real substantive difference between the candidates. That’s what Americans are being asked to decide in the next election—not whose gaffes are more damning.
Jared Bernstein served from 2009 to 2011 as chief economist to Vice President Joe Biden, and as a member of President Obama's economic team. He is currently a Senior Fellow at the Center on Budget and Policy Priorities, and an msnbc contributor.
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