The Scam of False Choices Has Radically Narrowed America’s Understanding of What Is Possible
Why should we have to choose between taking care of the economy and taking care of other people?
This article is the fourth in a series. Read part one here, part two here, and part three here.
When I entered the world of American politics as a young Hill staffer at the end of 2009, I did so as someone for whom the fundamentals of “the system” had worked very well. That primed me to embrace the system’s other aspects, too. I accepted what serious and responsible people said about the inefficiencies of government and the importance of “helping people help themselves.” I absorbed that political change happened best from within the system, guided by whatever party leaders, pundits, and legions of lobbyists and consultants determined was both acceptable and possible.
I internalized the trade-offs and choices that defined the conventional wisdom in Washington, D.C. — like the idea that governing responsibly requires choosing between free markets and affordable health care. Or choosing between entrepreneurship and the environment. Or choosing between protecting consumers and promoting GDP. I may have come to Capitol Hill with hopes of major social progress, but my understanding of the possible quickly shrank to deficit-neutral tweaks enacted through public-private partnerships with near-term time horizons.
I wasn’t alone in lowering my expectations this way. In Tailspin: The People and Forces Behind America’s Fifty-Year Fall — and Those Fighting to Reverse It, Steven Brill describes what he calls “one of the most amazing phenomena” of the past half-century: “the broad acceptance of the nonsensical idea, spread by those at the top, that America cannot afford to invest in effective job training, housing assistance, infrastructure, or other basics of a functioning government.” For decades, the notion that “tough choices have to be made because resources are so limited,” as Brill puts it, has dominated our political and economic decision-making, managing to capture even young progressives like me.
This idea — what Brill calls the “austerity refrain” — is a satisfying and righteous one to hold, especially for those doing the finger-wagging and lecturing about trade-offs and tough choices. But it’s often a scam, even if those perpetuating it genuinely believe in what they’re selling. The scam, to be clear, isn’t capitalism. The scam isn’t the idea that governments can’t print money endlessly or spend with reckless abandon. (Some economic principles seem to have stood the test of time.)
The scam is the finger-wagging and lecturing itself. The scam is the patronizing rhetoric about trade-offs and tough choices. The scam is the “austerity refrain.” The scam is the broad acceptance of the idea that America can’t strengthen unemployment insurance or expand access to health care or make housing more accessible or invest in scientific research or make public education more equitable because we can’t afford it. The scam is the zero-sum thinking that says we have to choose between taking care of the economy and taking care of other people. The scam is accepting the false trade-offs that narrow the concept of the possible to the small sliver of action that also serves short-term profits and political fortunes.
How do we know it’s a scam? Other nations offer plenty of counterfactuals. In a recent New York Times essay entitled “Finland Is a Capitalist Paradise,” Anu Partanen and Trevor Corson describe how Finland has managed to build a thriving private sector that coexists with thriving public services. Decades ago, Partanen and Corson write, instead of seeking to crush labor unions or drive tax rates to zero, Finnish business leaders came to the realization that “it would be in their own long-term interests to accept steep progressive tax hikes. The taxes would help pay for new government programs to keep workers healthy and productive — and this would build a more beneficial labor market.” These efforts have grown into “the universal taxpayer-funded services of Finland today, including public health care, public day care and education, paid parental leaves, unemployment insurance and the like.”
Despite the headline, Finland isn’t paradise (nowhere is). We can be assured that Finns don’t live perfect lives (no one does). Finland, like every other country, faces challenges and makes choices and accepts trade-offs. The argument here is not that if America makes exactly the same choices and trade-offs as Finland, then all will be well. (By nearly every measure, from geography and demographics to the size and complexity of the national economy, the United States is a very different country from Finland.) What this example offers is proof that there are other ways to make choices and trade-offs than the ones Americans been instructed to accept as gospel. Proof that the “rules” of the U.S. system aren’t actual rules, because a rule is not a rule if there’s an instance in which it doesn’t hold. The way things are is not the way they have to be.
We don’t even have to look beyond the United States to see that. Let’s consider one of America’s most significant challenges. The National Center for Children in Poverty estimates that one in five American children lives in a family whose income falls below the poverty line (which, the Center notes, “has been shown to underestimate the needs of families”). It would be difficult, one hopes, to find anyone who argues in favor of child poverty, so reducing it seems like a worthy investment that should garner bipartisan support. Immediate progress wouldn’t be that difficult, either. Recently, a special report in The Economist cited Columbia University professor Jane Waldfogel, who suggests that “even a universal child credit — a small amount of cash given for each child each month — ‘probably comes close to cutting child poverty in half just on its own.’”
A small amount of money to get children out of poverty. That’s not particularly radical. Or, at least, it’s no more radical than the support the government already provides for some other children, like those whose college savings accounts are tax-free.
Or take the nationwide scarcity of affordable housing. “It is not that the government does not spend enough to help Americans pay for housing,” Steven Brill notes in Tailspin. “The problem is that the government spends approximately 75 percent of its housing assistance dollars on middle-class and wealthy homeowners — by allowing interest on mortgages to be tax-deductible.” In other words, the government is already giving a lot of taxpayer money to a lot of people to help them buy a lot of homes, including quite a few big and expensive ones. Would it be any more radical to expand government housing benefits to more people — like those who are down on their luck and need a little help to get into a safe place of their own?
Or consider the broader narrative to which many serious and responsible people have long adhered: that America doesn’t have the resources to fight child poverty and promote affordable housing and take on a whole host of social and economic challenges at the same time. As Matthew Stewart points out in The Atlantic, federal tax breaks — all those deductions and exemptions that make the U.S. tax code so complicated — “exceeded $900 billion in 2013. That’s more than the cost of Medicare, more than the cost of Medicaid, more than the cost of all other federal safety-net programs put together.” Those tax breaks aren’t evenly distributed, of course: “51 percent of those handouts went to the top quintile of earners,” Stewart writes, “and 39 percent to the top decile.”
If the government spending money to improve human welfare is the definition of “radical” or “socialist,” the United States is already radically socialist — at least for those powerful enough to secure that public support. Many of the world’s biggest companies fit that description. In 2018, for instance, thanks to the Trump tax cuts, American firms paid $91 billion less in taxes compared to the previous year. In 2019, the largest six banks alone saved $18 billion on their taxes. Could that money have gone anywhere else? Anywhere at all? Well, as Eric Levitz noted in New York earlier this year, citing research from the Century Foundation, “if that money had instead gone to America’s neediest families, there would be 3.2 million fewer American children living in poverty.”
More than three million children lifted out of poverty! Sorry, kids, but times are tough, and we had to make the difficult choice to cut our own taxes instead. But if you work hard, you too can live the American Dream! We are already spending the money that serious and responsible people say we can’t afford to spend. The government is already providing the type of support we just know will sap individual motivation and make people dependent on public handouts for life. We are already making compromises and trade-offs.
It’s only when we talk about spending that money on different people — those who aren’t winners right now, or those whose historical disadvantages haven’t given them the same head start that others received — that we suddenly get all flustered and concerned about big government and runaway debt. It’s only when we talk about policies that might threaten the profits of big businesses that we assume the patronizing job of lecturing about the hard times and tough choices that we, the responsible ones, have to make for the good of the nation. It’s only when the compromises and trade-offs begin to threaten more powerful constituencies that we find a way to avoid having to make any compromise or trade-off at all.
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These critiques reflect a way of thinking that entrenched interests in America have assured us is naïve and unrealistic. It’s a way of thinking that makes many of them uncomfortable, leading to dire warnings of “radicalism” and “socialism” — sometimes even “radical socialism” — and a strong insistence that we should settle instead for some complacent tinkering with the status quo. A few years ago, I might have dismissed claims like the ones in this article as radical and self-defeating. As they read this, some of my friends on the Hill may be thinking, He’s only lived in Europe for a couple of years, and now he’s gushing about the Nordic countries like Bernie!
This seems like a good place to add a few caveats. This article isn’t an argument against compromise or pragmatism. It’s not a call to action for a socialist revolution. I don’t think businesses are enemies of the people. I don’t think politicians are wholly owned by corporations or donors. I don’t think our constitutional order needs to be torn down and rebuilt from scratch (nor would it matter if I did, because it’s not going anywhere).
Unlike some on the left, I don’t think debt or deficits are irrelevant. I still believe that free markets — real free markets that impose costs for externalities and promote robust competition, not the “free markets” of today — are an enormous force for good. I want hard work and merit and personal responsibility to matter as much as the rhetoric says they do. In spite of what I’ve written, I’m still confident that the private sector, not the government, should be doing as much of the job creating, resource allocating, and innovating as it can responsibly do. On the whole, in fact, I want the government to interfere in my life, and the lives of others, as little as possible.
In other words, I believe in capitalism. But what America has right now is not capitalism. We have a low-tax welfare state for the companies and individuals lucky enough to afford it, and what Scott Galloway calls a “Hunger Games economy” for everybody else. I believe in the idea of meritocracy. But what we have right now is not meritocracy. We have a self-reinforcing and self-stratifying system for protecting the lucky and punishing the not-so-lucky, masquerading as a beacon of opportunity, grit, and self-reliance.
In the United States, the public policy goals that are considered radical are considered radical only because we have accepted a radically shrunken notion of what is possible. The choices made every day by every one of us — where to allocate our time, money, attention, and effort — are just that: choices. The same is true for companies. The same is true for communities. And the same is true for nations. America’s political and economic systems are as entrenched as they are not because they have to be, but because we have allowed economic doctrine, political ideology, and financial self-interest to convince us that we don’t have any other choice. That we can’t do better than this. That this is just the way things have to be.
I am a capitalist in the middle of a profound rethink in terms of how I see and understand the world. A capitalist beginning to question the false choices and self-serving trade-offs that the political status quo has been perpetuating for decades. A capitalist hoping to help nudge the Overton window away from a place where we’re convinced that we can either regulate financial markets or create jobs. We can do both. We don’t have to choose between fighting childhood poverty, expanding affordable housing, building a thriving economy, and achieving any number of other public policy goals. We can do them all, if we choose.
To get there, we don’t have to blow up the entire system. But we do have to blow up the stories that sustain the system. The stories that rationalize why the successful succeeded and why the unsuccessful came up short. The stories that provide convenient cover for why the system works for some but not for others. The stories that define “radical” as anything that might make the comfortable a little less comfortable. The stories that make us susceptible to the scam of false choices.
This article, which was originally published on Medium, is the fourth in a series. Read part five here:
