State Budget Craters By $2 Billion More. The Good News Is....
... Now Progressives are going to have to stop talking about tax hikes and start talking about the value of government. That's right: "the value of government".
Progressives are nice people, they just have the wrong mental model of government. Government isn't a charity. It's a vital part of an economy and until Progressives understand that government's job is not to do good things but to add value, there's not going to be much Progress.
"Oh come on!" you may be saying, "how can we even talk about this `adding value' when we're $2 billion in the hole?" I know that the income tax will get a lot of cheers at the Jeanne Kohl-Wells function tonight, but in and of itself, an income tax will do more political and economic harm than good. That is, unless we Progressives do the hard work of forming and making the argument that government is worth the money, not because of the wonderful charity work it can do, but because government is essential to prosperity.
I support an income tax and I don't want to get too wonky and theoretical on you, ***but*** we're in a situation where our opponents are questioning that very value of government - and they are winning the argument. They're winning in the media because we're not answering the basic question they are asking (and training voters to ask). Here's why:
The typical Progressive's model of government is this: The Private Sector does the necessary, Government does the good. The necessary funds the good.
This is basically a religious model and while it's charming, warm and fuzzy, it's an inappropriate basis for creating good public policy.
Here's what government really is, in economic terms: Government is a conduit through which value flows between The People and the marketplace in a virtuous cycle.
In economic terms, everything from public transit to public schools to public art is a conduit for value. Whether it's law enforcement, regulation, conservation, subsidy - and, yes, even government charity work - Government benefits society when its actions increase the efficiency and positive reflexivity of value exchange between people and the market (and vice versa, obviously).
Conservatives cite economic value flowing from the marketplace to the government and deny that economic value flows back to the market. Rather than meet their argument head on, Progressives say "But government is good!" Americans are pragmatic, economically-minded people. "Good" will only pesuade them so far.
What does this mean in practice? Well, consider this question: "Why do we educate children?" Education is a very simple proposition. The payoffs are huge and the investment is very small. Conservatives question the underlying value of public education (and everything else public) because they see the value of education in terms of the value to the individual child and family. They believe that the individual child/family will find education in the marketplace if that's what's valuable to them. To this, Progressives say "Education is good!". That's not at issue. What's at issue is who should pay for education and why.
The value of government is not self-evident. Progressives have to be the people to put the value of government into words and numbers. "Good" is not enough.
In economic terms, we pay for public education because the consumers of education - children - are artificially constrained from providing liquidity to the education marketplace. First, children under 18 cannot borrow money to pay for their education, even if it was wise to lend them that money. Second, while education has a very large, positive, economic value, the payoff from that value is difficult to define and monetize at the level of the individual consumer - particularly of primary education.
We have very solid numbers for the "average" child, but if any individual were to ask a bank for money to pay for childhood education, they would be very uncertain as to whether that investment, individually, would be a good risk. There's just too much uncertainty, particularl if we're talking about primary education
. Banks lend money only if they feel quite certain the borrower more likely to pay them back at a profit. Individual borrowers can't, but huge, collective borrowers like governments can - or should be able to - borrow to invest in education because borrowing to invest in education makes governments more likely to pay their creditors back.
Again, education is a very simple proposition. The payoffs are huge and the investment is very small. Much else of what the government does is more difficult to value, but education is a wonderful model for government because so much of what government does - in economic terms - is to provide valuable information to the marketplace.
Government is still the most-trusted information source in our society. Progressives need to focus on that. Government is also an "expert consumer" of under-funded things that benefit the public and make their work and lives more valuable. Government needs to constantly send the information about the opportunities it sees back to the public - to constantly make the information-backed case for putting a proper, long-term value on what's productive, progressive and compassionate.
We need government that thinks of itself like a public-interest version of a hedge fund.
And where our society fails to deliver on what's productive, progressive and compassionate, the government needs to be the most efficient, open-minded and transparent provider it can be.
Again, the value of government is not self-evident. Progressives have to be the people to put the value of government into words and numbers. If not us, who? If not now, when?