Monday, December 04, 2006

THOMAS B. EDSALL: Risk and Reward

The G.O.P. is the party of risk, aggression, military assertion and dominance — an approach that led to the implosion in Iraq and the Republicans’ defeat in November. Now the Democrats have a chance to demonstrate a core difference in how the two parties calculate and manage risk.

In “Fiasco,” Thomas Ricks describes the results of the Republican approach: “Bush’s decision to invade Iraq … ultimately may come to be seen as one of the most profligate actions in the history of American foreign policy. … The U.S.-led invasion was launched recklessly, with a flawed plan for war and a worse approach to occupation.”

While inflicting destruction on the Iraqis, Bush multiplied America’s enemies and endangered this nation’s military, economic health and international stature. Courting risk without managing it, Bush repeatedly and remorselessly failed to accurately evaluate the consequences of his actions.

The embroilment in Iraq is not an aberration. It stems from core party principles equally evident on the domestic front. For a quarter-century, the Republican temper — its reckless drive to jettison the social safety net; its support of violence in law enforcement and in national defense; its advocacy of regressive taxation, environmental hazard and pro-business deregulation; its ‘remoralizing’ of the pursuit of wealth — has been judged by many voters as essential to America’s position in the world, producing more benefit than cost.

While some Republican long shots have paid off handsomely (the Reagan administration’s accelerated arms race arguably drove the former Soviet Union into bankruptcy), now the dice are turning up snake eyes. In November, voters concluded that the Bush administration had run one risk too many. After 40 years of ascendancy, the G.O.P. has provided Democrats with an opening. Will the Democratic Party, often insufficiently authoritative and bold, manage risk better? Democrats arguably suffer from their own impaired judgment: utopian faith in the power of negotiation and compromise — naïve, perhaps, in a world where the threat of bloodshed is endemic.

In this election campaign, the Democratic leadership offered pallid, nonspecific policy initiatives — in the House, a “bipartisan solution to strengthen Social Security,” and in the Senate, a call to “work together to strengthen Social Security and Medicare.”

Nonetheless, buried in a morass of campaign-season evasion were the outlines of a potentially salable political program. Representative Rahm Emanuel, the Democratic Caucus chairman, pointed out that 16 of the seats the party won in November were suburban or exurban. He contended that the election marked the emergence of a new “metropolitan” populism, “a revolt of the center against the Rovian model of polarization politics.” In Emanuel’s view, “Prescription drugs, gas prices and economic populism are no longer associated with blue-collar downscale voters. Office park workers can be just as populist as industrial workers — they are struggling under rising college and health care costs too. They resent giveaways to H.M.O.s; they don’t want subsidies to oil companies when oil is 68 bucks a barrel. We are going to deal with the oil royalty issue, and we can cut the interest rates for student loans.”

Serious Democratic policy makers are beginning to rigorously assess and quantify risk with an eye toward generating growth, calculating “second-, third- and fourth-order effects,” while aiming to avoid, for example, the “silent trade-offs” that the economic strategist Gene Sperling writes about, which occur when “well-intentioned policies to protect certain workers or communities impose burdens on similarly situated or worse-off workers who were not included in the immediate cost-benefit calculations.”

The morass in Iraq has created a Democratic moment. As the party struggles to forge a working majority, it must strike a delicate balance, argue Jason Bordoff and colleagues at the Brookings Institution’s Hamilton Project. Allocating excessive economic risk to individuals can harm economic growth as well as family well-being, they note. Conversely, “poorly designed programs to protect against risks can distort economic incentives and impair overall economic performance.”

For the Democrats to thread this needle will take a steady hand.

Thomas B. Edsall, who holds the Pulitzer-Moore Chair at the Columbia Graduate School of Journalism, is a guest columnist.

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