Who cares about the process? According to political scientists John Hibbing and Elizabeth Theiss-Morse, the authors of the book Stealth Democracy, it is the failure of politicians to satisfy the common folk’s “process preferences” that leads people to mistrust government. What does not lead to political mistrust, they forcefully argue, is any kind of dissatisfaction with the policies that governments pursue, whether ideological dissatisfaction or simple incompetence. These types of concerns, they write, are too complicated for most citizens to grasp; process matters, however, are simple.
I’ve always–for the few months I’ve been familiar with it–found this argument intriguing, but puzzling. Process, for one, is actually quite complicated, and most people have only a very basic grasp of how government works. Who then should we expect to care about process?
People like Ben Bernanke, who recently said that “The country would be well served by a better process for making fiscal decisions,” according to this New York Times story (via the Globe). The headline was that the “Fed chief blames politics for angst,” and this was the only relevant quote, so I tried to find a more extended quote. Here it is.
Finally, and perhaps most challenging, the country would be well served by a better process for making fiscal decisions. The negotiations that took place over the summer disrupted financial markets and probably the economy as well, and similar events in the future could, over time, seriously jeopardize the willingness of investors around the world to hold U.S. financial assets or to make direct investments in job-creating U.S. businesses. Although details would have to be negotiated, fiscal policymakers could consider developing a more effective process that sets clear and transparent budget goals, together with budget mechanisms to establish the credibility of those goals. Of course, formal budget goals and mechanisms do not replace the need for fiscal policymakers to make the difficult choices that are needed to put the country’s fiscal house in order, which means that public understanding of and support for the goals of fiscal policy are crucial.
The full speech is linked to from there. Note who Bernanke thinks does–markets, investors–and does not–no mention of the public–care about process here. The public is mentioned at the end, but only insofar as the public understands “the goals” of fiscal policy–not how the sausage is made.
Of course, I still don’t think there is anything inherently wrong with how we make decisions in this country–or if I do, I don’t have any evidence to support my beliefs. What seems to be going on, instead of any sensible discussion about how government works, is a kind of democracy-bashing, mostly by the business community. E.g.,
Eric Thaler, “Washington Should Try a Little Prudent Self-Restraint,” New York Times
Neil Irwin, “IMF’s Lagarde: View is growing that policymakers can’t make tough choices,” Washington Post
What exactly are these “tough choices?” And would economists / IMF officials do any better if they were in Congress’ shoes?
David Leonhardt writes about how the Fed takes a rather narrow view of economic policy, relative to the universe of economists.
Why does the Fed skew more hawkish than the economics profession as a whole? Part of the answer lies in the way the 12 voting members of the policy-setting committee are chosen. They are a mix of presidential nominees subject to Senate approval, with 14-year terms, and regional Fed presidents, who are chosen by outside boards that are made up partly of private-sector finance executives.
And maybe the shutdown compromise will actually lead to more “stability”, the New York Times reports (page A20).