December 22, 2013

WHERE WAS GRIDLOCK WHEN WE NEEDED IT?:

Don't Mistake This for Gridlock (TYLER COWEN, 12/22/13, NY Times)

The period immediately before the passage of the Clean Air Act of 1970 was a time of creative ferment in the United States, when different branches of government, including those at the state and local level, competed to offer solutions for cleaning up the air. Yet once these laws were passed, a period of retrenchment and gridlock set in, whereas Sweden saw through its reforms more consistently. Later, the United States had another wave of rapid policy change with amendments to the Clean Air Act in 1990. On balance, both countries ended up in more or less the same place, namely with effective antipollution laws.

That may seem old news, but similar patterns have been repeated recently. Consider the financial crisis of 2008 and 2009. Coordinated actions by the Federal Reserve, the Treasury and Congress geared up rapidly, were decisive by global standards and received a fair amount of bipartisan support. In contrast, the euro zone is still discussing how to manage its bailouts or whether to start a program of quantitative easing, which the Federal Reserve will begin to wind down in January. And Japan, after letting problems with bad banks fester for decades, is only now using monetary policy to fight deflationary pressures.

After that initial decisiveness in the financial crisis, America did indeed slow down in policy innovation. Bailouts and our activist central bank have become extremely contentious factors in the nation's politics, and there has been bitter fighting over how to set into motion the Dodd-Frank financial reform law.

Lunging and lurching forward with big changes, then enduring periods of backlash, consolidation and frustration, is often a better description of our political system than is "gridlock," which is too unidimensional a concept to capture the reality. [...]

Of course, gridlock can save us from major mistakes, and sometimes we should wish for more of it. One problem, however, is that the fear of eventual gridlock can make our policy lurches too hasty and ill-considered. It might have been better to think through the Affordable Care Act or the fiscal stimulus more carefully, but a now-or-never logic discourages such introspection. Indeed, subsequent improvement of the legislation has proved politically difficult in both cases.
Posted by at December 22, 2013 9:21 AM
  
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