ECONOMICS
When Economists Marketed a Vibe Shift
A few words on Thinking Like an Economist
Reading Elizabeth Popp Berman’s new book Thinking Like an Economist: How Efficiency Replaced Equality in U.S. Public Policy (Princeton University Press) got me thinking about an old interview with Elaine Kamarck. Kamarck was an early leader of the Democratic Leadership Council or DLC, the hub of Clinton-era New Democrats.
Kamarck lamented the difficulty one of her DLC economist colleagues, Rob Shapiro, had during the Clinton transition. She explained that Shapiro had “got into the position where he was constantly having to correct the economics of two lawyers who play at being economists: Gene Sperling and Bob Reich…he was constantly going down there saying, ‘No, this doesn’t work.’” At the time, these two lawyers were just planning economic policy for Clinton’s presidency, but both were riding high: Sperling was heading for the job of director of the White House National Economic Council and Reich to lead the Department of Labor.
Despite their central role in shaping the incoming administration, Kamarck said that “the basic problem was that neither of them was trained as an economist. Shapiro is a Harvard-trained Ph.D. in economics, so he was always having to fix what they did. [Sperling and Reich] obviously didn’t like that, so one of the bad things that happened in the transition was that Shapiro did not get a job in the first term.”
Shapiro didn’t get a big appointment, despite the rising prominence of his profession in Washington and all it promised to make the government better. Popp-Berman refers to this as economic style of reasoning, a catchall phrase used to capture a set of economic ideas about the value of efficiency, markets, and competition. This style isn’t employed only by economists (nor by all economists), Popp-Berman argues it has been adopted much more broadly, spread through teaching in a variety of fields like public administration and public policy. It quickly came to dominate how many thought about public problems and solutions.
What’s novel about Popp Berman’s approach is is it traces the rise and influence of this style on public policy, not among Conservatives, but instead within Liberal circles and the Democratic Party. In this re-telling of the last 60 or so years of US public policy, it isn’t just Milton Friedman, the Chicago School, and David Stockman that pulled for markets and de-regulation, it was Alfred Kahn, RAND, and Allan Schmid pushing as well.
As convincing as this thesis is, the DLC is surprisingly absent from Popp Berman’s story, especially given the overlapping one Lily Geismer tells in her new book. Democrats were out of the White House for twelve important years during this period, and it was the help of the DLC and a political strategy rooted in the economic style that they regained the White House in 1992. The DLC — and its affiliate the Progressive Policy Institute — used the economic style as a basis to re-brand the Democratic Party, severing its historic commitments to equality and a host of associated public policies and social groups.
But in Kamarck’s recollections of the earliest days of the Clinton administration, it was the DLC-wing of the party that was losing ground. Not only does Shapiro fail to get a plum economic job, DLC allies are passed over on designing health care reform, the signature proposal of the early Clinton administration. Kamarck chalks that up in part to “bad blood” with Hillary Clinton, but the consequence is others are in control of the this most important policy priority.
To be sure, the economic style wasn’t solely the domain of the DLC. In fact, this is one of Popp Berman’s points. The shift in thinking about public policy didn’t mean economists got all the jobs or that any single organization had all the answers. The pervasiveness of the economic style is much more subtle and implicit than a corporate raid on the Democratic Party.
Moreover, by the time the New Democrats were ascending, the economic way of thinking was already firmly established. It was President Jimmy Carter’s transition or even earlier than that, not Clinton’s, that got it all started.
This all leaves a big question for today. Did the Biden-Harris transition continue along this track or did we see a vibe shift?
It’s surely too hard to definitely answer this question and it falls outside of Popp Berman’s analysis. Nevertheless, in some recent and yet-to-be-published research (the paper was presented at the 2022 APSA Education Politics and Policy spring conference), I found groups advising the Biden-Harris team used the language of equity and fairness much more than the economic language of markets and competition. Perhaps most interestingly, this was true in comparison to the Trump transition and the Obama transition in 2008.
Perhaps we are, in fact, heading for another vibe shift.
