Good policy isn't always good politics

But it sometimes is

In a speech given yesterday in North Carolina, Kamala Harris outlined her economic agenda. Like all agendas presented in fairly short speeches, it was very general. Her main focus was on an expanded child tax credit, housing, prescription drugs and food prices. On substance, there were some things that I think are good and some things that are not so good while other things were unclear. From a political standpoint, it was very good and that is what she was really aiming for.

In a perfect world, good policy and good politics would always align. In the world we live in, that can be true, but often it’s just the opposite. Some of the best policies are toxic while some of the worst are very popular. Dealing with the problem of inflation has been a case study in demonstrating the tension between good policy and good politics. Since inflation took off in 2021, literally all the polling done on it that I have seen has consistently shown that the most effective ways to bring it down are the most unpopular, i.e., raising interest rates.

To get an idea of just how disconnected voters are from economists on bringing down inflation, see this recent polling done by a Democratic-aligned group. It asked respondents if they support or oppose various proposals for bringing down inflation. The 2 most popular proposals were cutting taxes and interest rates, both of which contribute to inflation. The third most popular proposal was prosecuting companies for price gouging and price fixing. That was part of Harris’ speech in which she talked about using the Federal Trade Commission to penalize grocery stores for “excessive” price raising.

From a policy standpoint, I was glad to hear that she only vaguely talked about going after companies for price gouging. I doubt anything will come of it beyond a few symbolic acts. From a political standpoint, I’m glad she talked about it. No matter how bad of a policy it would be, it’s what voters want to hear. She has an election to win and that’s more important than pleasing economists and policy wonks.

One writer I follow rationalized her price gouging proposal this way, “I spend a lot of time lecturing the left about the need to make compromises instead of demanding that campaigns be run on their loser policy ideas. Well, that lecture applies to me, too: The public demands action against ‘price gouging,’ my objections to such laws are a political loser, and I should make peace with the fact that I won’t get my way on this issue. That is how democracy works.” I second that. Voters are demanding some kind of action against price gouging and voters are always right. That’s not because they’re morally or factually right, but because they’re voters.

I wish voters were economically literate, but they aren’t and never have been. A candidate who tries to explain the nuances and tradeoffs involved in economic policies might as well forfeit the election. It’s easy to get mad at politicians for proposing dumb and destructive ideas, but they aren’t doing it randomly. They’re doing it because it’s what voters want to hear. Black-and-white ideas that involve going after an evil monster are popular and easy to explain. Gray ideas that acknowledge the complex world we live in are not.

The next time you hear an elected official or candidate proposing something obviously counterproductive, ineffective or purely performative, have some sympathy for them. Criticize what they’re proposing all you want, but remember that they’re only responding to what voters are demanding. If you want to be mad at someone, be mad at voters. You might even want to look in a mirror.

Voters being clueless about policy is something I wish those who write and talk about politics for a living would acknowledge more often. That doesn’t mean they should stop criticizing bad ideas, far from it. I criticize bad ideas all the time and will continue to. What it does mean is acknowledging that they don’t have to deal with voters or any other stakeholders. It’s easy to write about politicians making promises they don’t keep and to treat voters like they’re victims. Plenty of people do that, but you won’t find any of that here.

I would be doing readers a disservice if I did that. I will be the first to acknowledge that I’m just one person writing a blog from the comfort of my keyboard. I don’t have to deal with voters, lobbyists, advocacy groups, trade associations or anyone else. I can write whatever I want and not have to worry about losing the next election. I can and do advocate for ideas that I think are good, but are non-starters politically. I’m glad I can do that, but if I was a candidate or elected official I would be taking a very different approach.

Good policy, good politics

Don’t worry, this piece isn’t all complaining and lamenting things. While there are plenty of good ideas that have no chance in hell of passing because of bad politics, there are plenty of good ideas that are also good politics. The best example of that right now is abortion. The pro-choice position is very popular and has had one victory after another since 2022.

Abortion is a big part of why Democrats have been thriving in elections when they should be getting crushed. In large part because of abortion, for example, Democrats killed it in Michigan in 2022 and took over the state legislature. Abortion is now constitutionally protected there and Democrats got to pass a whole bunch of good legislation on other issues.

Abortion is going to be a big issue in the elections held this year. It’s something Democratic candidates everywhere are talking about while their opponents are quickly running away from previously held positions. It may not happen any time soon, but if Democrats get the chance to, they will federally codify Roe v Wade.

Another example of good policy and good politics is raising the minimum wage. It’s not as potent as abortion, but it’s something Democrats and voters everywhere support. In ballot initiatives over the last 3 decades, minimum wage increases have been resoundingly approved even in solidly red states.

From a policy standpoint, raising the minimum wage can have the effect of raising unemployment if it goes too high. Not too long ago, a large chunk of the workforce made less than $15 an hour, but that has shrunk dramatically. That makes negative employment effects less likely. In any event, unemployment right now is very low and plenty of states have high minimum wages so it’s not a barrier to full employment. Needless to say, raising the minimum wage brings plenty of benefits to those who get raises.

A third example of good policy and good politics is the Affordable Care Act. The ACA has gone through a lot since it was first passed in 2010. I have always liked it from a policy standpoint, but it was bad politics for years. That changed in 2017 once people saw what it did and didn’t want to lose it. Since then, insurance subsidies have been increased and Medicaid has been expanded in 9 more states.

Even in solidly red states, Medicaid expansion has proven to be popular. No matter how much a Democrat running in a red state will differ from most other Democrats on certain issues, all are supportive of Medicaid expansion. John Bel Edwards was elected governor of Louisiana twice in part by campaigning on expanding Medicaid and talking about the good things it did. Andy Beshear has done the same in Kentucky and Roy Cooper successfully got the legislature in North Carolina to expand it after 7 years of trying.

For Republicans, before 2017 the ACA was a gift that kept on giving. Having failed to repeal it and subsequently been clobbered at the polls, they want nothing to do with it. Trump will occasionally mention repealing it, but the position of almost all congressional Republicans is to act like they’ve never heard of it. Even if Trump wins and Republicans gain the Senate, I doubt they will try to mess with it. There’s no appetite for that anymore. It’s just as telling that on the state level, there have been no efforts to repeal Medicaid expansion even in states where Republicans are firmly in control.

Good policy, neutral politics

Plenty of things fall into this category. Legislation that gets passed with large, bipartisan support tends to be like that. The most recent example, which I wrote about, was legislation passed that advances nuclear power. The CHIPS Act and infrastructure bill are examples of that, too, as is legislation dealing with the postal service. All of those are good policies, but none are issues people are going to vote on.

The Inflation Reduction Act is the best recent example. It’s very good policy, as I wrote about when it was passed 2 years ago. It will help promote all kinds of clean energy and potentially help start whole new industries. It’s political effect has been non-existent and that’s a big win. Usually, when legislation is passed on a party-line vote, it’s on a measure that’s very salient, emotional and controversial, i.e., the ACA, and it provokes a backlash at the polls.

The biggest beneficiaries of the IRA have so far been red states and districts because that’s where a lot of manufacturing, sun and wind power is. I think that’s great because it builds support for the IRA in those places. Despite the benefits it has brought, the IRA is not going to make those states and districts blue. Come November, I don’t expect any of the energy provisions of the IRA to be something anyone votes on.¹

Another example of what I think is good policy, but won’t have much political impact is permitting reform. Right now, there is a bipartisan permitting reform bill in the Senate. It was passed out of committee on a 15-4 vote. It would be great for Harris to endorse it. Permitting barriers are the single biggest obstacle to clean energy of all sorts. Without changes to permitting laws, the IRA is going to be severely handicapped.

As good as permitting reform is policy wise, I’m highly skeptical that it would matter much politically. It’s not something voters are familiar with it and doesn’t make a lot of intuitive sense. Maybe that can be changed with the right ad makers, but I’ll believe it when I see it. 

Bad policy, bad politics

The flipside of the pro-choice position being popular is the Republican position of supporting draconian abortion bans is extremely unpopular. That’s why almost all Republicans running in key races are trying to distance themselves from it. It’s why Trump has been trying to sound like a moderate. I don’t believe it and nobody should, but it’s undoubtedly smart for him to try to position himself that way.

What many in the anti-abortion movement want to do is not just bad policy, but toxically unpopular. Taking abortion pills off the market or trying to limit access to them will make the Dobbs backlash look tame. Attempting any kind of national ban on abortion will provoke a backlash so great we’ll have to come up with a new word for it. That is to say nothing of any efforts to ban or restrict IVF or contraception.

Another example of bad policy that is also bad politics is privatizing Social Security. Bush pushed for a partial privatization of it in 2005 and it blew up in his face. The effort was toxic from the start and never even came up for a vote. Almost no Republicans have said anything about privatization ever since.

For so many reasons, it’s a good thing it didn’t pass. Just 3 years later, the stock market tanked. It’s true in the long run, the stock market will generate much better returns than treasury bonds, but that’s because it’s risky. Social Security is about keeping retirees secure, hence the name. Subjecting Social Security to the ups and downs of the stock market would defeat the purpose of it. If a whole bunch of retirees wind up losing everything, don’t think for a second they won’t be bailed out.

Abortion bans and Social Security privatization are bad policy and bad politics ideas from the right. The left, though, is not immune to supporting those kinds of ideas. We saw plenty of examples of that in the 2019-2020 Democratic presidential primary.

It’s now ancient history and not something any Democratic candidate or elected official talks about, but it was common then to hear people advocating for abolishing private health insurance. It started off as Bernie Sanders’ idea and had few other supporters. 2019-2020 was a very strange and unusual time. It was when the activist wing of the party’s influence was at its peak. Mistakenly believing the most vocal were the most representative, other presidential candidates embraced that idea, including Harris. She has since disavowed it.

The ACA was a small c conservative piece of legislation. It was designed to keep the existing health care and insurance system as it was, just to bring more people into it. Despite its modest aims, it almost failed to pass, provoked a major backlash at the polls and survived several brushes with death. Abolishing private health insurance and forcing everyone onto a single payer system would be the left-wing version of combining a national abortion ban with privatizing Social Security.

At a minimum, eliminating private health insurance is completely unnecessary. A public option is good, but forcing everyone onto one program is not. The way Sanders envisioned it was that it would cover every service under all circumstances, charge no deductibles or co-pays and, implicitly, never deny a claim. If you think healthcare costs are high now, you’d be yearning for times like these had that passed.

Another bad policy and bad politics idea from the left is decriminalizing border crossings. Like with abolishing private health insurance, supporting decriminalizing border crossings was caused by mistaking activists’ preferences for voters’ preferences. There is almost no support among the public for that, including Democrats. Elevating that idea was, at best, a waste of time as it was never going to happen and otherwise made Trump look reasonable by comparison.

Even those who say they want open borders don’t really believe it. As has been seen in cities like Chicago and New York, it’s easy to talk about open borders in the abstract, but having to deal with anything close to it is much less fun. Those are solidly blue places and even they don’t like having a huge number of migrants suddenly show up. Just imagine the reaction in places that are less blue, i.e., almost everywhere.

Don’t get me wrong, I think immigration is a good thing. It’s a big part of what makes this country great and can be a lifeline to areas that are losing people. I support efforts at comprehensive reform like what was attempted under Bush and Obama. At the same time, illegal immigration is not good and is not something to be encouraged. Decriminalizing border crossings would absolutely do that.

A third example of bad policy and bad politics from the left is banning fracking. That was another idea that was supported by many Democratic presidential candidates in 2019-20. In most states, fracking is not an issue because it doesn’t happen there. Pennsylvania has lots of fracking and is a perennial swing state. If Democrats ever hope to win in Texas, advocating for banning fracking is a guaranteed way for that to not happen.

Banning fracking is something supported by environmental activists who live in tiny bubbles. Democratic donors on the coasts often support it and they live in even smaller bubbles. Among the public, I doubt many people vote based on fracking, but those who do are in favor of it and, understandably, don’t want to be unemployed or see their economies tank.

From a policy standpoint, banning fracking is terrible on so many levels. Fracking has made natural gas a major generator of electricity. That has come largely at the expense of coal, which has contributed heavily to the decline in carbon emissions in the US over the last 2 decades. Fracking has made the US the biggest exporter of natural gas, which is great for allies around the world and for developing countries to use instead of coal. Who would love to ban fracking? Putin, coal companies and OPEC.

Good policy, bad politics

There are plenty of good policies, arguably even most good policies, that are bad politics. Ideas that I support, but are politically untouchable include, implementing a carbon tax and value added tax, repealing the tax deduction for employer sponsored insurance, federal pre-emption of local housing rules, repealing nearly all occupational licensing rules, repealing the Jones Act and repealing Buy American requirements in all legislation. That’s just what I can think of off the top of my head.

Bad policy, good politics

When it comes bad policy and good politics, we’ve seen plenty of that lately. The latest example is exempting income from tips from being taxed. Nevada is a swing state with a lot of people who make their money that way. I understand its appeal, but there is no reason why tips income should be exempt when wage income is not and that’s leaving aside the potential for abuse. It’s a bad idea first endorsed by Trump and now has Harris and Biden’s support.

Protectionist measures such as tariffs, quotas and Buy American requirements are popular and so is rent control. Those are things that make prices go up, waste resources and make building things harder, but voters say they like them so politicians deliver. Sometimes, bad policies and good politics are because of specific states. For example, ethanol subsidies exist in part because Iowa used to be a perennial swing state and was the first to vote in presidential primaries. The embargo on Cuba is still in effect because Florida was a perennial swing state before this election cycle.     

1. One part of the IRA that people may vote on allows Medicare to negotiate prescription drug prices. That’s about as popular of an issue as there is and is something Democrats everywhere support.