E.J. Dionne Jr.: The Risk-Aversion Spiral

Posted on Dec 21, 2006

By E.J. Dionne

WASHINGTON—In the new year, both Democrats and Republicans will have an interest in thinking about government in new ways. They will have to break the vicious cycle that blocks innovation. New York City Mayor Michael Bloomberg, a nominal Republican who doesn’t care much about party labels, has some ideas about doing just that.

The vicious cycle works like this: Because there is such a deep mistrust of government in so many quarters, officials are wary of trying new approaches which are, by definition, unproved. Daring to innovate means risking failure. Failure generates bad headlines, even charges of scandal—and the strong possibility that the pioneering politician will lose the next election.

But the failure to innovate only deepens public skepticism about government. Voters ask why government looks so slow, clunky and old-fashioned, and can’t seem to change. Skepticism deepens, innovation becomes even more risky—and the cycle goes on.

It’s true that government succeeds more than we want to acknowledge. Ask any elderly person if he or she would prefer to live without Social Security and Medicare. Ask parents in a good school district if they would like to abolish the public schools. But government failure is also a reality, and so is the aversion to risk-taking. What’s the way out?

In New York City this week, Bloomberg announced a new initiative to fight poverty, including a Center for Economic Opportunity and $150 million annually that would, among other things, provide incentives for the poor to stay in school, to build up their personal savings and to get preventive medical care.

The mayor would also create an Office of Financial Empowerment to “educate, empower and protect workers with low incomes so they can make the best use of their financial resources.” The poor often get ripped off by the unscrupulous.

The fund includes $25 million raised privately—a signature approach for Bloomberg, a billionaire and a major private philanthropist—which will give the program more room to experiment.

“When you do things with public money, you really are required to do things that have some proven track record and to focus on more conventional approaches,” Bloomberg told a news conference. “But conventional approaches, as we know, have kept us in this vicious cycle”—that phrase again—“of too many people not being able to work themselves out of poverty.”

Those who think Bloomberg is too liberal to be an honest-to-goodness Republican might notice that he also promised to “carefully monitor these new programs and hold them accountable for producing results—just as a business would. And if we find that a certain program isn’t making the grade, we will terminate its funding.”

There is no better way to win public support for government programs that work than to be serious about shutting down the ones that don’t.

Bloomberg has not launched a new Great Society experiment, and the importance of his initiative should not be exaggerated. While praising the program, Joel Berg, the executive director of the New York City Coalition Against Hunger, noted to The New York Times that it involved spending “only about $125 per person for the approximately 1.8 million New Yorkers living below the meager federal poverty line.” In New York City, $125 doesn’t get anyone very far.

Both of the major political parties would do well to embrace the spirit of Bloomberg’s initiative. Republicans desperately need to show that they take growing inequalities seriously and recognize that the new economy is leaving millions of Americans behind.

Innovative programs that focus on helping the poor to save, to stay in school and to join the workforce are exactly what Republicans should want to embrace. If their only domestic policy is tax cuts for the wealthy, Republicans will, and should, keep losing. In the wake of the handling of Hurricane Katrina, Republicans will also have to persuade voters that they respect government enough to demand that it behave competently.

Democrats rightly believe that government has an obligation to help those left out. Providing health insurance coverage to all Americans, for example, will require a major government role. But Democrats need to show they are under no illusions that all government programs work splendidly. Believers in government have the greatest interest in proving that it can correct itself.

Bloomberg likes to talk about government pursuing “thoughtful, practical and evidence-based strategies.” Buzzwords? Sure. But after six years in which clubhouse politics produced ideologically driven policies that were neither practical nor evidence-based, they are buzzwords that should have a future in Washington.

E.J. Dionne Jr.’s e-mail address is postchat@aol.com.

© 2006, Washington Post Writers Group

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