Economist (UK) 8/31/12: Talking crap in Holland vs. America
- Talking crap in Holland vs. Americahttp://www.economist.com/blogs/democracyinamerica/2012/08/fact-checkers?fsrc=nlw%7Cnewe%7C8-31-2012%7C3309426%7C37188934%7CThe Economist (U.K.)8/31/12The entire front page of the Volkskrant, one of the three top Dutch newspapers, is taken up today by an article about the misleading statements and inaccuracies in Paul Ryan's convention speech on Wednesday. This is interesting largely because the Netherlands is in the middle of its own election campaign, a pretty vicious one in which the leading parties are the laissez-faire Liberals and the far-left Socialists, and the vote is scheduled for September 12th. So you'd think the newspapers would be more occupied with their own country's political business than with controversies about who is or isn't lying in the American presidential campaign. One reason for the attention is that America really is a pretty important country. The other reason is that the story is piggybacking on an analogous controversy that's kicked up this week in the Dutch elections over truth, neutrality and budget assessments, and the comparison is instructive.The Dutch have a system intended to avoid the sort of fact-free insult-hurling that has plagued America's presidential race this year. The discussion in America over the rival candidates' budget plans has taken place in a vague and undefined discursive space, largely because the Romney-Ryan campaign does not actually have a budget plan. Mr Romney says he will keep the Bush tax cuts, slash income tax rates across the board by 20%, eliminate capital-gains tax for income under $100,000 per year, maintain defence spending, restore the $716 billion over ten years which the Obama (and Ryan) budget would have cut from Medicare outlays, and shrink the budget deficit by closing tax preferences, none of which he specifies. This doesn't add up, as the Center for Tax Policy found last month, but it's hard to say just how it will fail to add up, because Mr Romney has no item-by-item budget plan; we really have no idea how much he proposes to spend if he's elected.In the Dutch electoral system, this can't happen. Two months before the elections, every political party is expected to submit a detailed budget plan to a non-partisan agency called the Central Plan Bureau (CPB), which plays a role similar to the Congressional Budget Office in America. The CPB produces an analysis of the economic consequences of those budget plans. The effects are assessed in detail for 2013-2017, and there's also a prognosis for 2040 to discourage parties from larding up their budgets with short-term candy that leads to negative long-term consequences. The CPB's report came out Monday, and most parties had their strong and weak points. Of the two parties most likely to win the elections, the Liberals did well on deficit-cutting and long-term job creation but hiked income inequality and hurt household purchasing power; the Socialists did well on purchasing power and jobs in the short run but had low employment growth in the long run.The Socialists, however, were angry about a separate point: the CPB found their plans to reduce free-market competition in the health sector would lead to waiting lists. The Socialists say this isn't true, that it depends how much you're willing to spend on the sector, and they say that question doesn't fall within the CPB's remit; they're not health-care experts, they're economic experts, and they're expected to simply report what the economic effects would be. That disagreement came on top of Socialist anger over another health-care clash during a candidate debate last Sunday. In the debate, the Socialist candidate, Emile Roemer, started to lay into the Liberal candidate and current premiere, Mark Rutte, for proposing to increase out-of-pocket expenses in health-insurance plans. Mr Rutte immediately denied that he had proposed to do so. Mr Roemer, like most political observers who believed the Liberals' plans to raise the out-of-pocket limit were public knowledge, was flummoxed. It turned out after the debate that Mr Rutte had worked out a complicated theory that his party's plans constituted a transfer of some types of expenses from one category to another, rather than a hike in out-of-pocket expenses as such; but fact-checkers ruled this claim was false, and that the Liberal proposal was basically a hike in the out-of-pocket limit. In the meantime, however, Mr Rutte had effectively shut down Mr Roemer's attack in front of prime-time viewers. Mr Roemer was widely agreed to have lost the debate, and the Socialists have declined in the polls this week.The upshot is that, just as in America, the Dutch media are tossing around the question of whether neutral evaluations in the political campaign are worth anything. Some question the usefulness of the economic models the CPB uses, which (like all economic models) have never successfully predicted what the economy will do several years down the road. Others wonder whether the Dutch public pays any attention to fact-checkers, or whether a politician is better off scoring a telling point even if it turns out not to be true. Hence the headline of the Volkskrant article, which refers to the controversy over the Republican campaign in America but might as well be talking about the Dutch one: "The results count, not the truth".What the comparison with the American example points out, though, is that, for all the current media scepticism, the mechanism of the CPB evaluation dramatically raises the caliber of the electoral debate in the Netherlands. Obviously such assessments are to a large extent artificial: the actual budget of the Dutch government will look nothing like any of the proposals submitted by the parties, because the government will be a coalition of several parties, and the budget will be the result of a negotiating process. The same thing happens in America, where the president's proposed budget bears only a vague relationship to what ultimately emerges from Congress. Nonetheless, by forcing each party to commit to hard numbers in its budget proposals, the CPB evaluation tethers the Dutch political debate to fiscal reality.Even the Socialists, the party most often accused of fiscal irresponsibility, have presented a plan full of cuts and tax hikes that eliminates the budget deficit by 2017. Arguably, this bias towards austerity is pro-cyclical and a bad thing in a liquidity trap; perhaps the Dutch system encourages too much probity, but that's a separate subject. The point is, it is simply impossible, in the Netherlands, for a political party to end up systematically ignoring math and accounting the way the Republicans have at least since George Bush's campaign in 2000.Could we institute something like this in America? No. We can't. The reason is that in America, there are only two significant political parties. It's impossible for a neutral arbiter to preserve its public legitimacy when ruling on subjects of partisan dispute in an election if there are only two disputing parties. Neither side will accept the referee's judgments. The reason it works, for the moment, in the Netherlands is that there are currently ten parties represented in parliament, four to six of which are major contenders. That spreads the political polarities out in different directions and creates more space for neutrality.Hopefully the Dutch will continue to recognise the value of these refereeing institutions despite the current bout of fashionable, world-weary "ah, but what is truth?" pique. As to why the American press is becoming disillusioned with the fact-checking project: a lot of it has to do with the country's debilitating division into just two bitterly opposed political parties. It's no surprise that this kind of Manichaean political landscape sucks away the space for any legitimate neutral arbiter. Imagine what would happen to the legitimacy of baseball umpires if there were only two teams in the Major Leagues, playing every single game against each other.