Intro. [Recording date: July 27, 2016.]
Russ Roberts: So, let's talk about what's wrong with the Constitution. A lot of us--myself, I'd have to say would be in this group--think it's a pretty great thing. You're kind of treading on sacred ground here with a pitchfork--I don't know what you want to call it.
Terry Moe: Well, in a way, that's the point. It is sacred ground. And it shouldn't be. I think there's a lot in the Constitution to be admired and protected. And continue. William Howell and I are big supporters of the Constitution.
Russ Roberts: That's your co-author. I should have mentioned him.
Terry Moe: Yeah. Right. But, you know, we think it's very important for people to look at the Constitution objectively and ask: How does it affect governance today? It was written a little over 225 years ago by Founders who had no idea about the problems we would be facing today and the kind of government that we would need to be responsive in an effective way to those problems. And so they designed a government for their times--for the late 1700s. For a nation of 4 million people, 700,000 of whom were slaves. Of the free people, 95% were farmers. This was a time when government wasn't expected to do much. And the Founders designed a government of separation of powers with a parochial Congress at its center that couldn't do much. And, you know, that may have been fine for the late 1700s, but it's not fine for today, when we're just awash in problems that need to be dealt with.
Russ Roberts: You are also very critical of the Founders' attitudes, and you suggest, as others have, that perhaps the Constitution isn't a reflection on what would make the best government, but what would make the best government for people like them--aristocratic, slave-holder, wealthy, elite folk. Do you want to push on that a little bit? [?] on that?
Terry Moe: Many different forces went into the design of the Constitution. But I think part of it was their fear of tyranny of the majority. These were essentially aristocrats. They were propertied people who had a lot to protect. And they did not believe that all men are created equal.
Russ Roberts: Cheap talk.
Terry Moe: This was a nation that had many hundreds of thousands of slaves, for one. Women couldn't vote, for another. So, they didn't believe that everyone was equal in any sense. They believed that they and people like them should continue to control their government. And so what they meant by democracy is very different from what we mean by it today, and how responsive we expect government to be to the needs and concerned of ordinary people.
Russ Roberts: I'm a little ashamed to admit that, when I read your book, one of the things I learned from it--not that I didn't literally know, but didn't think about it enough--is that they were so eager to stress the separation of powers that even the legislative branch has two pieces. I know there's a Senate and House (House of Representatives)--I knew that before I read your book. But I always just think, 'Well, we have a Senate and House.' I never thought about that for them that was also a way to weaken the power of the legislative branch even though that was a bulwark against the judiciary and the Presidency.
Terry Moe: Yeah, it's a big--
Russ Roberts: The Senate was very different than--you should mention--than the House. Mention how it was different.
Terry Moe: Yeah. So, having a two-house Congress was a big part of the separation of powers. The whole point was to have a number of different veto points that made it difficult for government to act. And the House was the house of the people, essentially--the closest to the people. The Senate was fully expected to be dominated by aristocrats--people like them. And they were chosen by state legislatures, not by direct election. And it was fully expected that they would be a check on the House. And that both of them, of course, would check the President.
Russ Roberts: Yeah; and of course the electoral college was an intermediary between the voice of the people and the election of the President. Again, we just sort of take that for granted. I've often thought about the virtues of the electoral college, because in today's world people are so horrified by it. But whether it's a good thing or not and how it gives incentives to candidates to campaign and gets paid attention to and all that--it certainly was seen by the Founders, you are saying, as a distancing from direct democracy.
Terry Moe: That's exactly right. It's a buffer between the Presidency and the people.
Russ Roberts: So, what do you see as particularly troubling about that? Most people think that those are good things--separation of powers. You are particularly eager to indict in your book the incentives that Congress faces, given that system.
Terry Moe: Yeah. I think the heart of their system is Congress. Congress is the lawmaker: Congress makes the laws. But Congress is designed by the Constitution in such a way that the members of Congress are rooted in their districts and in their states. And therefore, they are highly responsive to the narrow constituencies and special interest groups that populate those districts and states. And therefore, they are pulled in all these different direction, each of them sort of a political entrepreneur in his or her own right. And the result is that we have this institution that is simply not designed to think in national terms about national problems and pursuing national solutions. What they are doing when they are able to make legislation is designing legislation in such a way that the members of the coalition that are going to get on board have to be given something. Right? Special provisions. So you have all sorts of special interest provisions that load up all pieces of legislation like a Christmas tree with extraneous items that please special interest groups. And the result is not actually crafted as the most effective way of solving social problems, like globalization or persistent poverty or health care or whatever the problem may be. Right? It was true 50 years ago; it was true 100 years ago; it's true today: This legislation that we get is really legislation that's weak, larded up with special interest group provisions in order to provide political reasons for Congress to get on board and not intellectually justifiable content that will provide an effective attack on social problems. So, it really goes back to the Constitution's design that makes Congress a parochial body with members rooted in districts and states, that give them political incentives to design legislation in a way that is not effective at solving the nation's social problems.
Russ Roberts: So, if we had gone back in time to the time of the Founders and said to them, 'You know, you are kind of skeptical about the value of direct democracy, yet you put in your system a desire for members of Congress to be responsive to their constituents; and that's just going to lead to trouble,' what would they have said? I think I know; I'm curious what you think.
Terry Moe: Well, I think in their view, Number One, government just wasn't expected to do very much. This was a very rural nation of just 4 million people. And so they felt that with the separation of powers design in which aristocrats played a major role--
Russ Roberts: We should probably call them 'elites,' by the way. 'Aristocrats' connotes some kind of nobility--the Earl of--
Terry Moe: I don't think so, actually. I think we did have an aristocracy. These were like large plantation owners.
Russ Roberts: Yeah, it's true.
Terry Moe: A great many of the Founders owned slaves.
Russ Roberts: Yep.
Terry Moe: Ten of the first 12 Presidents were slave owners. We have to remember these things.
Russ Roberts: Right.
Terry Moe: Okay. And so I think they felt that in constructing a separation of power system, as they had, and protecting their own positions, as they had, that any threat of sort of the people rising up and really dramatically changing things and expressing demands for redistribution and the like--these had been minimized through their design.
Russ Roberts: Wouldn't you say--the way I would think about it is--they would have relied on the Constitution itself to restrain some of those urges of the populace--because those would have been unconstitutional? If you showed the Founders today what is considered acceptable legislation, I think they'd be shocked. So, people like me who want a smaller government, who want the government to be less involved, we tend to argue for a more constructionist approach to the Constitution. I'm willing to concede that that's a naive form of reform, the idea that we can put that genie back in the bottle I think is a form of--somewhat akin to what Yuval Levin talks about in The Fractured Republic--he was a guest on this program--about misplaced nostalgia that might not apply to today's world. And for me--I'm not a Republican, I'm not a Democrat--so, those of us who are more libertarian, where's our golden age? 1790 but with freed slaves. Of course. So, to indict myself, that's a little bit naive. So the fact is, we are where we are is a powerful Congress not prone to look for national problem-solving things: rather, look for ways to aggrandize themselves, profit and stay in office.
Terry Moe: And Congress is that way by virtue of its design.
Russ Roberts: So, one of the examples from the book, which I didn't know about, which is very illustrative--it's a little bit of cherry-picking, which of course is your right as the author of the book to pick the most dramatical cases to tell your story--but talk about the model cities. Because that's just kind of stunning. And it's kind of a perfect example, so I understood why--
Terry Moe: That's a great example. So, during President Johnson's War on Poverty in the 1960s, he set up a bunch of task forces to address various social problems. And one of them was the problem of urban decay. Which was very serious; and something needed to be done about it. This task force that he set up was filled with experts and people from the bureaucracy who knew something about this problem, and one legislator, Senator Abraham Ribicoff, from Connecticut. And so, they came up with this idea--which was a novel idea--of, instead of like dribbling money into cities to try to help them, they would concentrate money on a small number of "model cities." And their idea was, 'We'll pick 5 or maybe 10 big cities, and we'll concentrate money on those cities and really show what can be done when the money is concentrated.'
Russ Roberts: Or what can't be done.
Terry Moe: That was their idea.
Russ Roberts: It's kind of a lab idea.
Terry Moe: It's like an experiment.
Russ Roberts: Yeah. It's a nice idea.
Terry Moe: Right. And so, Ribicoff said, 'You know, this is a great idea but you should really have 50 cities, one for each senator'--
Russ Roberts: One for each state--
Terry Moe: to give Senators a reason to vote for it.
Russ Roberts: Right. I would have said 30 or 40.
Terry Moe: One for each state. Sorry.
Russ Roberts: But each Senator could then claim that it was theirs, or whatever. But 30 or 40 would have been fine, too; but 50 states.
Terry Moe: So, then, listening to that, the committee itself decided to expand the number of cities--they actually expanded it to like 66; sent it over to Congress--House; and of course people in the House wanted more cities. It just wasn't enough for them. And so in the end, 'Model Cities' was adopted. And they wound up selecting over 150 Model Cities. Each of which got very little money. And it included "cities" like Smithfield, Tennessee.
Russ Roberts: Important.
Terry Moe: Which has a couple thousand people, was the home town of Joe Evans, who chaired the Appropriations Subcommittee which was in charge of this whole thing.
Russ Roberts: Shocking. Actually, the good news is it was less than 435. You might have predicted even more than 150.
Terry Moe: Right. So then, you have to ask yourself: 'What is the point?' What is the point? The idea was to address the problem of urban decay. And so they passed this legislation: What is this thing that they passed? What is the point of that thing? The only point of it was to funnel money into the districts in the states of the members of Congress. And that really typifies the way Congress approaches all kinds of legislation. They are not actually trying to solve a national problem in the most effective possible way. They are just trying to pass legislation that will benefit them as political entrepreneurs.
Russ Roberts: So, I would argue that there's nothing new under the sun: that's been the case since roughly 1789--
Terry Moe: Absolutely. I'm with you.
Russ Roberts: The only change is that I think some of the restraints on the legislative process that the Constitution used to impose have now been loosened, so that it's worse than ever. I would argue that what we would call Christmas tree or pork barrel or log-rolling or 'I'll scratch your back, you scratch mine'--all these are various words with different levels of cynicism--but this is an old problem.
Terry Moe: Yeah. Absolutely. And that's our point, that it goes all the way back. It's not a new thing. It's a Constitutional thing.
Russ Roberts: And you then argue that the President is better equipped to deal with national problems. And therefore we need to make the President more powerful. Which to me is a horrifying thought. At first. So, I'm going to say up front that, particularly in 2016, the idea of an even more powerful President seems somewhat alarming. But, I just want to give a little foreshadowing to the listeners: I will say that your method for doing it is quite interesting. So, please don't hang up the--don't put your phone away, listeners. But, let's first talk about the President. What's unique about the President, say, relative to Congress?
Terry Moe: Okay. I think it's really important to recognize that members of Congress have their incentives structured in a very distinctive way to behave in the ways we've just discussed. They are parochial. They will be unable to provide us with effective government. [?] Congress is a pathological institution. Right?
Russ Roberts: You're doing great so far, Terry. We're 100% agreed. Keep going.
Terry Moe: Okay.
Russ Roberts: It's a sausage factory. And you're not going to like what it tastes like when it comes out.
Terry Moe: That's right. Okay. So, Presidents are motivated very, very differently. Presidents have a national constituency. They benefit themselves as politicians from thinking in national terms, about national problems, and adopting national solutions that work.
Russ Roberts: And that have a longer run-time, which you point out in the book.
Terry Moe: Yeah, well, the thing is, they care about their legacies. This is a really crucial thing. People joke about this, that they sit around obsessing about their legacies. This is a very good thing, because what they're thinking is, 'I want to be great. I want to be regarded as the greatest President who ever lived.' Why do they do that? Well, they have to take on major problems for societies--like when President Bush took on Social Security, for instance, it's that kind of thing--resolve them in a way that people will look back on them 20 years from now, 50 years from now, saying, 'Man, what a great President.' So, presidents are thinking in the long term about durable, effective policy solutions, and they are the only ones doing that. So, our solution is not to make the President the dictator, but to just say, 'Look, we have a system in which we have a Congress, we have a President; but Congress is pathological. It will never provide us with effective government.'--
Russ Roberts: Correct. It's just romance.--
Terry Moe: 'We are awash in social problems which need to be dealt with somehow. And so what we're suggesting is that we simply shift a measure of power from Congress to the President. Now, this doesn't make the President a dictator. We're just looking at one aspect of their Constitutional relationship, which is the legislative process.
Russ Roberts: Now, before we get to that, I just want to push back for a second on the legacy thing. Because, of course, the legacy--the desire to have a great legacy while it has many beneficial things, also has some negative things. So, doing very little is not the road to being a remembered President.
Terry Moe: Right.
Russ Roberts: So there's a natural bias built into the Presidency because of that desire for legacy, to "do something." And I would argue that, say, in foreign policy, it's like 'Give a person a hammer, you look for a nail.' You put the President in charge of the U.S. military, he--he or she, perhaps--does have a tendency to use it in the hopes of doing something that is memorable. [?] you give the example of Lyndon Johnson. Vietnam certainly tarnished his legacy tremendously. George Bush's legacy perhaps will be tarnished. It seems that now it is, right now, but maybe it will be changed. But it's certainly tarnished by the War in Iraq. Does that worry you at all?
Terry Moe: No, not really. For instance, George H. W. Bush could have gone into Iraq and didn't do that.
Russ Roberts: Correct.
Terry Moe: He chose not to do that. Why? I think he's thinking about what's best. Because he's responsible for the thing.
Russ Roberts: True.
Terry Moe: Okay. Also, take Ronald Reagan. What Ronald Reagan wanted to "do"--in quotes--was to cut back on the size of government. Right? To retrench the welfare state. I assume this is the kind of thing that you would like.
Russ Roberts: It wouldn't be the first thing I would pick. But it's not the worst thing.
Terry Moe: Okay. But this is an example of a President doing something that's actually making a government smaller. Or trying to. I don't think he was successful at that.
Russ Roberts: No.
Terry Moe: But he was unsuccessful because our government provides him with a structure that's unworkable. Right? So, this is another example of why we have a government that's so ineffective, because you have a guy like Ronald Reagan who comes in, that want's to do something big. Can he do it? No.
Russ Roberts: You use Obamacare as an example of a disappointing policy because it kowtowed too much to what Congress wanted in the design. He certainly turned over many of its provisions to Congress. Ironically, it was a disaster for the original members of Congress who voted for it. It was a rare moment, I think, where Congress--I think mistakenly, but they thought it was--either they thought the political costs would be smaller or they thought the national interest was more important; they wanted to part of something they thought was great. They actually, in some sense seem to have acted against their self-interest in that setting. But your general point would be that that legislation is way too complicated for what it could have been.
Terry Moe: Well, I think, number one, it was a landmark and a breakthrough and an unusual piece of legislation. Presidents had been trying for 60 years to do something about universal health insurance. And they had all failed. This included Nixon and Ford; it wasn't just Democrats.
Russ Roberts: That's a great point.
Terry Moe: And so then, Obama was successful at doing this. Okay. So then the question is: What did he do? Well, Obamacare is a mess. Why is it a mess? Because there are really powerful interest groups that have a lot of power within Congress. And they were able to step up and really shape this legislation. And so, why can't we import drugs from Canada, to get less expensive drugs? Well, pharmaceutical companies say no. Why can't the government bargain with the pharmaceutical companies like they do in other countries to keep drug prices low? Pharmaceutical companies are against that. So, we pay higher drug prices--by a lot--compared to people in other countries. You know? Same thing for the insurance companies. Same thing for the trial lawyers. You go right down the list. They all got their special provisions in this Act. And, there are all these special interests that are protecting the employer-based insurance system that arose after WWII, that leaves millions of people uncovered. And so what the reformers did was just cobble together something, lay it together on top of the existing system. And what you end up with is a mess, because there is no legislative process that actually allows for a coherent, intellectually well-justified kind of policy to emerge.
Russ Roberts: So, let me make the argument in a different way, which appeals a little bit more to me. When we passed--not passed--when employer-based health care became common in the aftermath of WWII, it just--it was a result of the way the tax system was set up; no one sat around and said, 'Wouldn't it be great to get your health insurance through your job?' It's a bad idea, right? Nobody would say that's a great way to structure it.
Terry Moe: Right.
Russ Roberts: So then you say, we've got to fix that. And as things glom onto it over time, it becomes literally unchangeable--there's no ability to ratchet back and say, 'You know, in 2016, when people change jobs frequently, when some people, of course, are going to be unemployment, when health care has gotten incredibly expensive because we've taken out all the incentives to keep it cheaper--and so therefore not having health insurance is much worse than it was in 1950--you'd say, 'Well, this whole thing, part of the root of this is it's a really bad idea of employer-based health care. Let's start from scratch.' And you can't, partly because over time you've tweaked the system in various ways to respond to the special interests that you are talking about. And the ability to go back to Square One, to sunset, basically, a law, a legislation that establishes something like the system that we have is virtually impossible. I can't think--but I'm not that imaginative--I can't think of an example where we've said, 'Gee, times have changed so much. Let's start over.' We tried it a little bit with agriculture; and you mentioned it a little bit in your book--
Terry Moe: That didn't work.
Russ Roberts: Yeah.
Terry Moe: And with the tax system.
Russ Roberts: Correct.
Terry Moe: 1986 Tax Reform Act. So we get this big reform; and then after a while Congress's incentives just kicked back in and they larded up with 15,000 more special interest provisions.
Russ Roberts: And it's really worse than it looks. Because to the extent you can go back to Square One, start from scratch, clean slate, it then just rebuilds itself up again. So it's kind of like: 'We need to re-sell this rug,' in the bazaar: 'We need to rebuild this mess again. So we'll pretend we are doing this for the good of the country, but of course we know that over time it's just going to get back to where we are.' And that's, for them, a feature, not a bug. It's like we could then sell, effectively through influence money, etc., these new provisions and special carve-outs for people who want them.
Terry Moe: That's right. The system remains in place. Right? And so, even if you achieve a major reform, like the Tax Reform Act in 1986. The system is still there. Congress is still there. The incentives are still the same. And sure enough, the old problems with the old tax system just grow right back; and before you know it you have 15,000 special interest provisions added to it.
Russ Roberts: Each one. [?]
Terry Moe: And with health care, the point that I wanted to add to what you said, which I think is correct: you know, you have this employer-based system that grew up after the War, and then you have all these interests like insurance companies, and even employers, that have a stake in that system and in keeping that system: okay, well, they have political power. Where do they have political power? In Congress. And so if you try to--if you come along and you say, 'Hey, we should do this differently, in a way that includes everybody--not just people who have jobs--and it's cost-effective, and here's a coherent way of doing that--okay, you have no chance of getting something like that passed. Why? Because the political system that we have, that privileges special interests and members of Congress from all over the country that are responding to those interests rather than trying to do something for the nation as a whole.
Russ Roberts: And when times change, and people change jobs more often, and the Congress realizes, 'Gee, this is a problem with the current system'; then they attach other things to the current [?]--
Terry Moe: Layer them on--
Russ Roberts: COBRA (Consolidated Omnibus Budget Reconciliation Act) and other things. 'Oh, yeah, we've got to fix that.' But instead of fixing it, really they just kind of do a bandaid that's actually not very effective.
Russ Roberts: So, you don't want a dictator. Right? A benign dictator. That would be one solution. Not a very attractive or realistic one. So, what do you want? How can we enlarge the power of the Presidency without damaging the incentives that are good about being the President?
Terry Moe: Yeah. Well, we think that there's a very simple way of making a big dent in the problem. What we're proposing is just leaving the whole Constitution in place.
Russ Roberts: [?] and managing it. A realistic strategy.
Terry Moe: Yeah, and making one small, very realistic change to the way legislation is handled. That's all. Okay. And what it involves is adopting a Fast Track reform, as we've had in international trade for 40 years. We have a lot of experience with this. And Fast Track then, under our proposal, would cover everything, under our proposals. So, the way it would work is that the President would propose a policy, on anything. And whatever it is, whether it deals with taxes or welfare or the environment or you name it, Congress would have to vote on it within a particular period of time--say, 90 days. It would have to vote up or down. And it would have to vote on a majoritarian basis. Right? So, no filibusters. No delays. Now, Congress can vote No. Right?
Russ Roberts: Yep.
Terry Moe: So the President still has to win over both the Senate and the House.
Russ Roberts: Majorities.
Terry Moe: Majorities, to get these things passed. But, the President would be the one who designs these policies. Congress would have no right to reach in and add special interest provisions or take provisions out, or basically muddle up or mess up what is in fact a coherent policy package. Why would we expect it to be coherent? Because Presidents, unlike all of the other players, have the strongest incentives to craft policies in the most effective ways, because their legacy depends upon that. So, this is all it comes down to, right? So, people can say, 'Hey, you are making the President more powerful.' Look, it's only more powerful in this one way. Right? Which gives the President the capacity to craft policies in effective ways. Which the nation desperately needs. But, we still have separation of powers in place. Congress still has to say Yes to anything that happens. We still have a Supreme Court, and the entire Court system. We still have the Bill of Rights. Basically everything is exactly the same. And people can say, 'What about unilateral action by the President?' This is a horrible thing that the President--this has nothing to do with that. It doesn't affect that at all. That's the same as it is now. Right? Our book is not about that. And reform is not about that. It's just about changing the legislative process so that the actually policies that come out of it are better.
Russ Roberts: So, again, the book is called Relic. Which is a great title, by the way, even though I disagree with it. You spoke, when you described this idea, you said, 'The President would propose a policy.' Of course, Presidents don't propose policies. You are really talking about presidents putting forth legislation, and having legislation originate in the Executive Branch rather than in the Congressional branch. Which, you are suggesting is really the source of the problem. I can't have a policy that says, 'I wish workers made more money.' You've got to explicitly [?]
Terry Moe: Well, that's not what I mean by policy. I mean, you would have to have a policy that is designed--let's say, minimum wage. A minimum wage policy. Okay, that's a policy. And there's a real structure to it, and rules, and so on; and it specifies what has to happen. And so okay, that policy is proposed. And, under Fast Track, Congress would have to vote on it as it is. They can't mess with it.
Russ Roberts: But when you say, 'Vote on it' it has to be explicit. It can't just be, 'We'll have a higher minimum wage.' It would have to say how much, it would have to say--
Terry Moe: But that's the way it is, the way policies are now. There are bills that go through Congress. The question is, who is going to write them?
Russ Roberts: That's what I'm saying, that that's what you are proposing. That they originate, instead of this byzantine committee system, which you quote Steve Teles, former EconTalk guest, is a Kludgeocracy, with all these veto points. Instead it would originate in the Executive Branch and then be subject to Congressional veto. Unlike the current system, which is it originates in the Congressional Branch, and is subject to Presidential veto. Which raises a question. Why don't Presidents, given their ability to veto more bills, and given that most bills, as you are suggesting, do not serve the national interest: Why don't they veto more of them and be the check on the Christmas tree, logrolling, pork-barreling problem that you are talking about?
Terry Moe: Because then I think government would just then grind to a halt. Presidents aren't overridden very often in their vetoes. And so if anything is going to happen, Presidents have to go along. It's like with Obamacare. Why did Obama basically turn over Obamacare to Congress and let Congress write it?
Russ Roberts: Which he also [?] with the Stimulus Package, to the horror of many economists. I was against the package.
Terry Moe: Yeah, welcomed the separation of powers--
Russ Roberts: Even worse that he let Congress design it.
Terry Moe: Yeah. I welcomed the separation of powers. Obama was just recognizing that he could not determine the outcome. He needed Congressional support. The only way he was going to get it was by letting them do these things. And he had to. And the example in the case of Obamacare was what happened to Clinton. Right? So, Clinton had this massive health care program that he'd designed; and the White House. And members of Congress weren't going to have it. And it went down in flames. And it was one of the biggest policy fiascos in modern history.
Russ Roberts: And a disaster for him, in so many ways.
Terry Moe: Absolutely. And Obama wasn't going to go there.
Russ Roberts: So, in that way, it was smart on his part, what the results were--a different question.
Terry Moe: Well, I think Obama was thinking, 'This is the best I can do.'
Russ Roberts: Yeah. So, basically, to summarize, you are suggesting we need to have Congress's role in legislation be an up/down only response to a bill, rather than their current policy of feeding it through the Congressional sausage factory--
Terry Moe: Well, let me just add to this, that we do say that Congress can still pass it's own legislation, just like they do now. Presidents can veto it. But members of Congress can go ahead and pass legislation. We're not taking that away from them. What we're adding is Fast-Track authority for Presidents. So, any time the President wants to make a proposal to Congress, Fast Track kicks in; and Congress has to vote on that proposal, up or down, within x number of days.
Russ Roberts: Without amendment, complications--
Terry Moe: Right. Without amendment, filibusters, and you know, presidents will be smart about that. They'll want to get these things passed. And I think that will lead to more policies getting passed that are effectively designed, rather than these weak, cobbled together, God-forsaken things like Model Cities that Congress passes.
Russ Roberts: Would the budget go through this process?
Terry Moe: Yeah.
Russ Roberts: How would that happen? Because it could? Because presidents would then just propose a budget that Congress would just have to vote on?
Terry Moe: Presidents do propose a budget. By the OMB (Office of Management and Budget).
Russ Roberts: I forgot. It's kind of a piece of theater, sham.
Terry Moe: And also there will be communication back and forth.
Russ Roberts: They are in the same city, aren't they?
Terry Moe: Yeah. So they will talk; and presidents will want to anticipate what Congress is going to do. But this does give presidents the upper hand in crafting something that's more like what they want.
Russ Roberts: So, I kind of like this. Kind of. What you are really saying, again, just to make clear, it's an additional option, not changing "anything else," in theory. How would it happen practically? What would have to be done? Let's go back to Fast Track. We'll come back later to whether people are happy with Fast Track or not. It complicates the marketing of your idea. But how did Fast Track get approved?
Terry Moe: Congress approved it.
Russ Roberts: So, would they have to approve what you are talking about? Why would they?
Terry Moe: Well, this would be an approval of a Constitutional Amendment.
Russ Roberts: Why would it have to be a Constitutional Amendment?
Terry Moe: Because it changes the nature of the--well, it doesn't have to. But what we would want is a Fast Track authority that would be permanent. For all legislation. And Congress is not going to do that. And they could revoke it at any time.
Russ Roberts: Which kind of ruins the whole thing.
Terry Moe: Yeah. Wrecks the whole thing. So what you need is a Constitutional Amendment. Will Congress do that? No, I don't think so. Unless something odd happens. It's always possible, like when Congress gave Presidents the line-item veto. Right? Under Newt Gingrich. That the Supreme Court struck down. Every now and then something weird like that happens. But basically Congress is not going to do this. The alternative--
Russ Roberts: To celebrate[?] your book. And they realize--
Terry Moe: Yeah, they are persuaded by ideas. The alternative is for the state legislatures to request a Constitutional Convention that would then adopt this amendment.
Russ Roberts: A Constitutional Convention? But once we have a Constitutional Convention, everything is up for grabs. So that's always been a tough sell. Why can't we do the thing--just go around and get petitions in each state, referenda, sign it, get enough states, and that way we can get a Constitutional Amendment.
Terry Moe: I think that scholars are unclear about exactly how this would work. And my own view is that our job, in this paper, in the book, is to try to get people to understand that the Constitution has major consequences for our lives: that it undermines effective government, that it's up to us to try to do something about it; and to try to get people interesting in doing something about it. And then the question is: Okay, how can this thing actually happen on the ground? Well, okay, Congress is unlikely to want such an amendment.
Russ Roberts: Right, so that's one route to a Constitutional Amendment.
Terry Moe: So we need to try to get around Congress. And one way to do it is through the Convention route, through the states. And when I said that scholars weren't clear about this, it's unclear whether the Convention can be constrained to consider, say, one amendment. That, it would be called only to consider that one amendment.
Russ Roberts: But there is another way to get a Constitutional Amendment passed, right? Can't you have each state vote within a certain period of time, to get a Constitutional Amendment?
Terry Moe: Well, I think what you are talking about is, like, with the Equal Rights bill.
Russ Roberts: Right. Can't you go state by state?
Terry Moe: Well, first Congress adopted it.
Russ Roberts: Ohhh.
Terry Moe: And then three-fourths of the states have to say yes.
Russ Roberts: So that's going to be a non-starter.
Terry Moe: Yes.
Russ Roberts: So, this is close to a non-starter.
Terry Moe: I don't think it is.
Russ Roberts: So, make the case for me. I'm sitting here thinking, 'You're telling me that scholars aren't sure whether you could constrain the Constitutional Convention.' How would that work? How would a Constitutional Convention in 2017, say--who is in it? Who is going to be in Philadelphia? Who's there?
Terry Moe: Well, we haven't had one of those in eons. And we don't talk about that in the book, exactly how this would happen.
Russ Roberts: Other than this feature on EconTalk. A bonus feature here on EconTalk, for listeners.
Terry Moe: So, I think we can say we don't know exactly what would have to happen in order for Fast Track to be adopted in this part of the Constitution, because this is like a train, moving forward. And I think it should be done very carefully. And I, like you, am concerned about the risks of this. I, and William Howell, we are both concerned about maintaining the rest of the Constitution and preserving and protecting it.
Russ Roberts: Except for that Second Amendment. Right? Because that's silly: 'They didn't mean militias.' 'They meant militias.'
Terry Moe: We don't want to go there.
Russ Roberts: Seriously. I'm kidding. But how would you keep the people attending that Convention from doing something with an amendment that you or I say might like or [?]?
Terry Moe: Again, this just raises legal issues about how these conventions actually get set up and whether the scope can be constrained. And, I'm not a legal scholar. I don't know the answer to that. But I'm a political scientist, and I think my job first and foremost is to try to understand the consequences that the Constitution has for our governments today and to identify ways that we might be able to move forward. And I think this is one of them. And it may be that it wouldn't work out as a practical matter, but we should think about these things.
Russ Roberts: I like the idea of thinking about it. I'm not sure we can get there in a way that's, maybe, comforting to me. But I think the other challenge you have in marketing the idea to the general public--to me it's imaginable that, out of shame, and perhaps an unusual set of events, Congress could pass such a potential Constitutional Amendment that would be voted on by many states; or we could get to these other more comforting method. But isn't one of the challenges that, just even the very phrase 'Fast Track' has a marketing problem to the American people given that for better or for worse many of them think that trade agreements have been a rip off of America's interests? I think that's incorrect as a general statement, but most Americans don't agree with me, or at least I worry that they don't. Most people would say, 'Oh, it's going to be like trade agreements? That's horrible.' How are you going to convince them otherwise?
Terry Moe: Okay. Well, first of all, I'm not a PR (Public Relations) expert, and I don't think of this in terms of PR. I think the lesson of the Fast Track is that if Presidents are going to negotiate trade agreements--and of course they don't do it personally; they have their people who do it--and if they're going to deal with all of these nations out there, they cannot have Congress meddling in all of the details. Right? So, Presidents are able to craft an actual agreement that nations have signed on to. And it is crucial that that coherent, well-justified, well-integrated thing not be ruined by being torn apart in Congress. So, Fast Track is made for that. And it has worked really well over time. Now, this other question of whether we should be entering into these trade agreements in the first place is another issue. Now, in the past, Congress has voted Yes on most--not always--but it's voted Yes on these things. I suspect that going forward, they are less likely to vote Yes, unless those agreements are changed. But the importance of Fast Track is allowing the emergence of a coherent agreement that Congress can vote on this. It says nothing about whether Congress is going to vote Yes or No. They can vote No. And I think in today's environment they are likely to.
Russ Roberts: I think the challenge--I think about Milton Friedman, and I talked to him one time about NAFTA (North American Free Trade Agreement)--and he said, 'I'm against it.' And I said, 'Why?' And he said, 'Well, because a free trade agreement should be one page. It should say: We hereby eliminate all our tariffs and quotas on products from Canada and Mexico.' In fact, NAFTA is a big fat thick set of regulations. Now, my view, which might be naive, is that most of those regulations, most of the pages of NAFTA are about slowing down the pace of certain tariff removals, keeping some in place unfortunately--but that it was a movement toward free trade and better than nothing. Not as good as Milton wanted, of course. But what would seem to me to be the case is to the extent it is a bad bit of legislation--and to take one example, the truckers. The trucking industry was very unhappy about the idea that Mexican truckers would come into the United States, so they, on the basis of alleged safety concerns that were foolish and silly and dishonest--because what they really cared about was the pocketbook--they decided those would not be phased in for 10 years. And I think when the 10 years was up they still didn't phase it in. Etc., etc. So, even with Fast Track we have many of the special interest provisions that you are concerned about. They just come in through the 'making sure Congress still votes for it' problem. So, it is in many ways, the separation of powers that you are trying to open a little bit, doesn't disappear. The problems of the separation of powers.
Terry Moe: So, let me just frame that a little bit differently. We have a Separation of Powers system. Ultimately the President can't have what he wants. He can craft a policy that Congress has to vote on, and he wants Congress to vote yes. Therefore, he has to make sure that he has a majority in the House and the Senate. Therefore, he has to, like, bargain with these people. So you get into the same kinds of problems with special interests and all the rest. However, the President is the champion of effective government. He wants these policies to be effective and coherent, and to work. And so they are in the hands of the one person who doesn't want to give up the essence of the policy by actually allowing all these perversions to get in there. And so the problem is minimized by giving him more power. So, that's the thing. It's not that the problem goes away.
Russ Roberts: Okay.
Russ Roberts: Now, let's talk about the bigger issues underlying these points. It's a very provocative book. It's also short, by the way, which I really appreciate. It's only about 180 pages.
Terry Moe: That, with big print and big margins.
Russ Roberts: It's big print, relatively big print. So, for some that's a, you know, you don't get as much for your dollar; for others, it's a big feature not a bug. You indict the Constitution very vigorously in the beginning of the book. One perspective would be, 'Well, you know, I think we're doing pretty well. Yeah, I concede that there are all these bad--this legislation that's messy and ugly and doesn't really do what it might do. But, you know, over time it's been a pretty good run.' Are you suggesting that it's just now that things aren't going well? Is it the trend you don't like? Is it the nature of the problems we face? Because I worry that many of the problems we face at the national level--many of them, not all of them--are problems the President can deal with if he wants to. A lot of them are related to poor policy, terrorism, etc. What are your thoughts on that? Isn't the Constitution a secret of our success?
Terry Moe: I think you regard it as an indictment of the Constitution because--
Russ Roberts: It's called Relic, Terry.
Terry Moe: Almost nobody thinks in objective terms about the Constitution's actual impacts on modern governance. There's too much Constitution worship. Everybody's down on their knees worshipping the Founders and the Constitution instead of thinking objectively about it. It's not a perfect thing. It doesn't affect us in 100% good ways. So, in the end, what we're saying is, 'Look, it undermines effective government. There are things we can do about it.' We never said anything about getting rid of the Bill of Rights. Or getting rid of the Separation of Powers. Or getting rid of Congress. We didn't say any of those things. It's a way of making an adjustment that will make this structure, almost entirely intact, more effective. So, I think, if you say, 'Oh, the President can do a pretty good job if everything stays the same with dealing with today's problems': No he can't. That's what our book is about.
Russ Roberts: Okay. So, let me try a different approach. One of the ways that sometimes we summarize the essence of economics on this program is: No solutions, only tradeoffs. So, when you talk about the big issues in the book--immigration, health care, education--we really don't--I don't want a President who can solve those because they really can't be solved that fast. What the President can do, even if the President did have the kind of authority you are talking about, at best what the President can do is help some groups of Americans at the expense of others improve one set of issues at the expense of others. Or do you think that there are "solutions" to health care, immigration, education that would just be obviously better than others?
Terry Moe: Well, this is a democracy. So, what counts as a problem and what counts as a solution is in part a matter of democratic perspective: What is it that people want? Right?
Russ Roberts: I actually don't agree with that. So, I was going to raise--you want me to--
Terry Moe: I think most people would agree with what I just said. But maybe--that's fine--
Russ Roberts: Cool. I know they do. When you say 'What the people want,' I don't know what that is. There is no--that's really my point, is that there's no unified--other than avoiding a nuclear attack on the United States that kills everybody or being overcome by a foreign aggressor, our interests are not unanimous. And the will of the people is a will 'o the wisp. It's a--the Arrow Impossibility Theorem makes it pretty clear. So, you got the question.
Terry Moe: But basically, we have a democratic political system in which we have elections, and we have leaders who are elected. They run based upon promises that they are making based on how they are going to deal with the major social problems of our times. That's what this campaign is about; it's what every campaign is about. Always. Republicans have different solutions than Democrats do, but they are always talking about how we are going to solve these problems.
Russ Roberts: Well, that's because people want to hear that. They don't want to hear that they can't be solved and there's only trade-offs.
Terry Moe: Well, they want them solved. Maybe you don't.
Russ Roberts: That's an illusion. You can't solve those problems. You can only--
Terry Moe: You can do something about them.
Russ Roberts: Yup. That's true.
Terry Moe: That's right. And so, some things that are done are more effective than others. And so, what you want is a government that can be effective at dealing with these things. So, you take immigration. We have 11 million people or so who are here without documentation. The laws are not being adhered to: the laws are meaningless. So this is a legal system in crisis. We also have farmers in California who can't get enough workers for their fields. We have Silicon Valley workplaces who would love to bring in highly talented immigrants from other countries who can't get them in. Whereas in other countries, they adjust their immigration system to make sure they are able to attract these highly talented people. So, this is a system that clearly constitutes a problem, and calls out for a solution, some kind of solution that would be better than what we have now, right? And I think almost everybody--maybe not you, but almost everybody thinks, 'Yeah, we can do a lot better than this.' Okay. So, in 2005, and 2006, and 2007, President Bush submitted a bipartisan bill that had great support in Congress, actually. And in 2007 and 2008, that bill, those bills, went down to defeat due to a filibuster in the Senate. Actually there was a majority support in Congress to pass those bills. In 2013, Obama proposed a bill that went down, even though it had majority support; and the reason it went down was that John Boehner used his agenda powers in the House to just not bring it up for a vote. Even though there was a majority there that would have voted for it. Under Fast Track, those things would have passed. Right? We would actually have had immigration reform that reconstructed immigration law and that did something about the 11 million undocumented immigrants, and that did something about the Silicon Valley problem and the agriculture problem.
Russ Roberts: So, why did that not happen? Don't give me the answer which is obviously literally true--we are talking about causation. There's the ultimate cause and the penultimate cause, etc. Obviously it didn't happen because certain people stopped it from happening. But what would you say is the political reason? What were the forces in motion that kept that kind of change--and I'm agnostic about whether that was a good idea or not; I didn't look at those any of those bills. I wouldn't pay attention to them at the time. But something real, not just the desire for people to--
Terry Moe: Okay. Well, I can give you a democratic perspective on it.
Russ Roberts: Yeah.
Terry Moe: Institutional perspective. Which is that, in our system, perversely, we have filibusters in the Senate. And even though there was majority support in Congress for this thing in 2006 and 2007, a minority in one house of the legislature torpedoes those bills.
Russ Roberts: So: Why? Why did they do that? They could--part of the reason, you say, is because they could. But why were they willing to do that? What was their interest?
Terry Moe: Okay. Well, first of all, I would say one response is, 'Who cares what their interest is? They're a minority. This bill has overwhelming support in a democratic system. And whatever these 30 people, 40 people, however many there are--
Russ Roberts: It's a republic though. It's not a direct democracy.
Terry Moe: Well. All right. They are a tiny number, compared to the numbers of people who were willing to vote for this thing.
Russ Roberts: But I'm biased. I'm a big worrier about the tyranny of the majority, whether it's the people, or the legislators. So, in this case, the smaller group--agreed, it was not a majority--decided to stand athwart this change and say, 'Stop.'
Terry Moe: I think the thing--
Russ Roberts: They had some interest in doing so.
Terry Moe: The single most important thing, I think, is that Republicans want to stand in the way of anything that looks like a path to citizenship for Latinos.
Russ Roberts: Who are more likely to vote Democrat.
Terry Moe: Absolutely. They are 2:1 Democrat.
Russ Roberts: Okay. That's, I think, true, and not a good reason to stop [?]. That's interesting. Now, there's other legislation, I assume, that is stopped for other reasons. That was a purely political calculation. It's a cynical view, but I suspect you are probably right.
Terry Moe: Yeah, but I think it's also important not to judge other people for calculations and just say, 'Different people have different interests.' Fine. So what kind of system are we going to have for designing policy, given that people don't agree? Okay, well, if we have a system of filibusters, right, and two houses, and all the rest: well, basically if we have any kind of problems that are at all complicated and serious, right, you are not going to get anything. And if you do, you are going to get some God-awful thing that doesn't really solve the problem. Welcome to American Democracy. Welcome to American institutions. And it goes all the way back to the Constitution.
Russ Roberts: Well, I kind of like it, I have to say. Because I wish government did less rather than more. I think to sell people like me--not that we matter, because we're also a very small minority--it's--I'm willing to concede the possibility that this kind of institutional change, if it could be agreed on, might make things better. That government might get smaller. It's conceivable, as you suggest in the book. And so that it's not necessarily, that getting rid of filibuster might not just mean government's going to get bigger at a faster rate.
Terry Moe: Right. Let me just add something here. Because you bring up the small government thing. Our book is not about big government versus small government. I think what people often think is, 'Oh, well, you think government, effective government, is all about solving social problem.'
Russ Roberts: That's what it sounds like.
Terry Moe: Yeah. And it is. But that's what Reagan was trying to do. What Reagan was saying is: 'Hey, the welfare state is a social problem. It's way too expensive. We shouldn't be doing most of these things--'
Russ Roberts: True, 'It's ruining people's lives,'--
Terry Moe: 'We need to cut back on the welfare state.' Right? That was his social problem. And so what could he do about that? Not a lot. Right? Why? Right? Because we have a government that is set up for sheer ineffectiveness. And he was mired in it.
Russ Roberts: Well, that's a very good answer. Okay.
Terry Moe: So, what I would say is, if you favor small government, you should favor small effective government. And you are never going to get the small government--because we have a really big government--you are never going to get the small government unless you have an effective government where a leader can come in and say, 'Okay. This is what we're going to do.' And it actually happens.
Russ Roberts: Yeah. So actually, I agree with you. I think in theory your proposal is even more attractive to a large government person who--you know, I always want to say, if government stuck to what it does well, many more people would be positive toward it, be willing to let it do more than it does now. The fact that it does so much so poorly to me suggests putting less in government's control and more in the control of individuals, either acting in voluntary ways through charity or through their own individual decisions. And we'd have a better government. So, that would be great. But we don't have that world. We have the sausage factory. And how anyone in the presence of the sausage factory can advocate putting more things onto the plate of Congress is strange to me. But there's a lot of romance in politics.
Terry Moe: So, I'm with you. I don't want the sausage factory to be in charge. And so, what we're saying, is, 'Look, the sausage factory is a reality. And it's not going away.'
Russ Roberts: Right. Correct.
Terry Moe: So what we want to do is to recognize it for what it is; say this is a Constitutional thing. It's not an accident. It's not going to go away. Ever. So, like, what we should do is like move it to the periphery of the legislative process, and shift power to the champion of effective government--the President. Just in the legislative process, and only there. So that he makes the proposals. And the sausage factory only gets to vote Yes/No. They don't get to make sausage. Right? He's the one who is designing policy. Not them.
Russ Roberts: So, I like that: that part of it is appealing. Let's close with a sort of meta-question about these kind of issues for me, which is: A lot of times we hear people say, 'We should be more like Scandinavia.' Or, we should be more like Country X. I have a lot of different responses to that, intellectually and emotionally. But one of the responses is: 'Well, we're not a lot like Scandinavia, as a nation.' Not just because they have a smaller population above the Arctic Circle. We're not like Scandinavia because we are an incredibly heterogeneous country. And many policies that seem to work well-my favorite example is the bureaucracy. Being a bureaucrat in many of those countries is considered an honorable profession. Something people strive for and get prestige from. Not so much in America. Right? We have a different attitude. People will chalk that up to our individuality and our frontier origins. And I think it really misses what really is driving both our attitudes toward these kind of issues and our attitudes to the policies that come out of Washington. Which is that we are an incredibly heterogeneous country. So, some of the sausage that comes out of this isn't the result of special interests, per se--manipulating the system. It's the fact that we are really diverse. Our interests are not always unified. And that's the fundamental reason that we get bad policy. So, my lesson from that is: Let's put fewer things into the grinder and let's leave more of it outside of Washington. Do you want to react to that?
Terry Moe: Well, first of all, you are not going to stop things from going into the grinder. Because people want government to do things. Right? And I think we do have a very heterogeneous society. We are not Norway. And I think it's very important to recognize that. So, we have to deal with the United States as it is. Right? So, Congress is the ultimate in diversity. And in the kind of heterogeneity you are talking about. And in making it as bad as it can possibly be politically, because you have 535 people, pulling in 535 directions trying to get their things. Right? Trying to make sure that if a policy passes, it's got some provisions in there for them. Right? And so you can get some cobbled-together thing, and that doesn't solve any problems. So, that's the way heterogeneity works out in this institutional context. Now: Do institutions matter? Yes. They do. So, heterogeneity is one thing, but you can plot institutions down on the heterogeneity, and some institutions will do better than others. That's our point. Right? So we think an institution that has a Fast Track component will do a better job in a heterogeneous society than the one that we have now.