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December 16, 2007
David Warsh, Proprietor


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When the Facts Change

Back in the days when Economic Principals was still writing occasionally about US politics, EP was an early proponent of Sen. Hillary Rodham Clinton as a presidential candidate in 2008. Such a possibility was thinkable only because George W. Bush had won the tug-of-war following the tie election of 2000.

If a son could succeed his father at an interval of eight years, EP argued in October 2004, surely then a wife could succeed her husband after a similar interval. Another four years would be required to judge the Bush presidency, for it was then just beginning to be truly tested in Iraq. Whatever happened in Baghdad, the relatively centrist Sen. Clinton would be the strongest candidate on the scene to succeed Bush when he was done.

Four years later, the Republican collapse has been more extensive than could have imagined. The broad-but-tacit mandate to decentralize under which successful candidates have campaigned (depending on how you count) since 1976 (Jimmy Carter campaigned on “zero-based budgeting”), ’78 (the year that Newt Gingrich went to Congress) or ’80 (the Reagan landslide), is expiring anyway after some 30 years, the normal length of time for an American political cycle.

The Bush implosion, a special situation having to do mainly with filial loyalty and ambition, has been even more acute. Not that plenty of capable public servants haven’t served under Bush, sometimes briefly, in the Treasury Department, the Commerce Department the National Economic Council and the Council of Economic Advisers. But now they must prepare for many years in the political wilderness.

Meanwhile, Sen. Barack Obama has come a long way in popular estimation from the newcomer who gave stirring convention keynote address in 2004. The books he wrote, his decision to contest the Democratic nomination, the assembly of a competent campaign staff, his choice of Austan Goolsbee, of the University of Chicago’s Graduate School of Business,  as his principal economic adviser – each has spurred additional confidence. Even his first-grade ambition to be president, derided by Sen. C., worked in his favor, after he owned up to it.

With the quickening pace of events, suddenly everyone has an opinion. Here it seems likely – yes, likely – that Barack Obama will win the Democratic nomination during the lightning-fast caucuses and primaries of the next two months. As polished and experienced as is Sen. Clinton, this is almost certainly a more desirable outcome, given all that has happened these last sixteen years. Unlike Clinton, Obama would be free to form his own identity in domestic politics, and to devise an agenda capable of commanding broad support. In all likelihood, he would do a better job of repairing the United States’ reputation around the world.

Sen. Clinton has shouldered her responsibilities admirably these last dozen years. Even while running her hardest during the next few weeks, she should privately prepare to accept defeat gracefully, if it comes, and to continue her excellent work in the Senate. If he wins, Obama will have many months to organize his campaign against the GOP candidate, who EP guesses will be Mitt Romney.

So what about that confident judgment of three years ago that Hillary Clinton would likely be the nominee? What about all-economics-all-the-time? The task EP set itself this week turned out to require some more reporting. As Keynes famously said, when chivvied about some inconsistency in policies he had advocated against the Depression, “When the facts change, I change my mind. What do you do, sir?”

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The remarkable gridlock last week that occurred when a widely-expected snowstorm hit Boston around noon is likely to have memorable consequences. How bad was the traffic jam? On Thursday afternoon a physician friend reported that it took nearly five hours to drive the two miles from his office on Longwood Avenue to his home in downtown Boston. Walking was not an option; he spends part of every day in a wheelchair.

 Experts will be studying exactly what happened for months to come – the interplay of driver psychology, forecast accuracy and policy in this particular event. But already it is clear that some form of congestion pricing must be part of the long-term response to urban traffic generally. London and Stockholm already have successfully levied fees on motorists who drive in their center cities. New York Mayor Michael Bloomberg last spring proposed a three-year pilot program to charge drivers to enter Manhattan below 86th St. on weekdays – an $8 toll for cars and $21 for trucks. There’s nothing simple about this in New York: the state legislature in Albany must give its permission. It is scheduled to take up the thorny problem in March.

For several reasons, it is necessary to change the climate of opinion about public transit in cities. One is congestion: property values sag and cities stagnate when their most vital districts are too inconvenient to reach. Two is pollution: cars and trucks in cities are profligate contributors of greenhouse gases, compared to trains and buses. Three is even more fundamental. It has to do with cultivating the habits of citizenship, with fostering the mindset of successful and orderly egress itself. People need to get to work and home again, even in emergencies. Police, firemen and ambulances must be able to operate. Travelers who are willing and able to pay a high price must be able to reach their destinations (except, of course, in cases of genuine catastrophe – we don’t auction seats in a lifeboat).For decades, the sine qua non of urban office development permitting has been the provision of parking spaces adequate to the footprint of the building. Someday they are going to put Ping-Pong tables in those underground spaces, and wind chimes in the high-rise garages.

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