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The 2020 Public Services Trust Blog

Wednesday, April 1, 2009

Big and Small, Bottom and Top

By Henry Kippin

Barack Obama may only have been in office for 2 months, but already Robert Reich has set out his stall in a comparative analysis of the President’s economic policy. In an article published over the weekend in the Wall Street Journal, he sets out ‘Obamanomics’ to contrast with Reagan’s own response to severe economic downturn in the early 1980s.

Reich posits that ‘twenty-eight years ago, Ronald Reagan used the severe economic downturn of 1980-82 to implement an economic philosophy that not only gave force and meaning to a wide range of initiatives but also offered a way back to sustained economic growth.’ He asks, ‘is there a similarly powerful animating idea behind Obamanomics?’

The fiscal context might (at a push) be similar, but the article is actually more about setting out the key differences between Reagan and Obama. And in doing so, it highlights some interesting lessons for the packaging of policy reform.

Where Reagonomics implied a ‘trickle down’ approach, Obamanomics favours ‘trickle up’ reform. This is based on the belief that ‘an economy grows best from the bottom up’ – so government intervention should be focused on stimulating productivity at the bottom end of the scale, not just facilitating growth at the top.

In normal times, one could presumably split these two approaches according to how they envisaged the state. For Reagan, government was (famously) the problem. A more redistributive Obama agenda would logically need a more expansive state.

So, Reagonomics is top down, small state; Obamanomics bottom up, big state. Easy, right?

Not quite. The recession has meant that the policies don’t quite fit the packages anymore, and ideological dividing lines have been blurred by the failing financial system. Obama’s big government is now as much about bailing out AIG as stimulating public works programmes. And would a Reagan government have let Wall Street collapse for the sake of a slender state?

The picture looks similarly blurred over here. A future Labour government may have to make public spending cuts; a Conservative one will inherit a virtually nationalized banking system. But the packaging don’t matter – its what’s in it that counts.

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Posted by Henry Kippin at 9:12 pm
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Tuesday, March 31, 2009

Obama PERSONALLY paying for White House renovations… lessons to be learned?

By Ashish Prashar

Watching Sky’s 24-hour news coverage of President Obama touching down on the tarmac at Stansted airport tonight, ahead of the G20 Summit a thought occurred. What would he think of the mess that is our MPs’ expenses? Being as Google has the answer for everything, I did some quick fire research, and found this in New York Mag, the news and features section:

At a time when people are having trouble holding on to their houses, Barack and Michelle Obama have sensibly decided not to use taxpayers’ money to renovate theirs. New presidents are allotted $100,000 to overhaul the White House residence and the Oval Office, and the Obamas hired Hollywood decorator Michael S. Smith (known, per his site, for mixing “Old World classicism with very contemporary settings”).

But the First Couple isn’t spending that money. They “are not using public funds or accepting donations of goods for redecorating their private quarters,” says Camille Johnston, director of communications for the First Lady. Nor is the couple, who reported $4.2 million in household income in 2007 tax returns, using money from the White House Historical Association, a privately funded foundation that paid for a $74,000 set of china shortly before Laura Bush left town.

But does this mean they’re going to spend more than $100,000 or less? Though Michelle Obama has talked up Pottery Barn, Smith’s client list includes cost-is-no-object types like Rupert Murdoch, Steven Spielberg, and former Merrill Lynch CEO John Thain-for whom he procured that $87,783 rug. “There’s no question that he’ll get it done in the way that it’s supposed to be done,” says Smith client and Democratic donor Katherine Chez. “But how, I don’t know.” The White House declined to disclose the budget, saying that all expenses would remain private as a result of the Obamas’ decision to absorb the cost.

Maybe just maybe our MPs could learn a lesson or two from this?

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Posted by Ashish Prashar at 9:55 pm
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Tuesday, January 27, 2009

From individual consumption to social contribution…

By Ben Lucas

The times are changing and the era of individualism, which stretches back to the 1980s in the Anglo-American world, looks like it is drawing to a close. President Obama’s inaugural speech last week contained a strong call for society to embrace a much stronger ethic of responsibility. This responsibility stretches from big corporates, whose perceived greed, especially in the banking sector, has precipitated the global recession to individuals who will be expected to pull together to get through these difficult times.

As Obama said: “What is required of us now is a new era of responsibility — a recognition on the part of every American that we have duties to ourselves, our nation and the world; duties that we do not grudgingly accept, but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character than giving our all to a difficult task. This is the price and the promise of citizenship”

What is striking about the new emphasis on responsibility is that it not only introduces a new expectation of social responsibility to the business world but it also calls into question the language of consumerism which has been used to drive reform in public services. If, as Obama has said, we are going through difficult times which require a more mature conversation about how these challenges can be met, then we have to think about the relationship between citizens and the state as being a more active one than consumerism implies.

In Britain, politicians are still playing catch up with this new world. Last week saw two interesting developments which could suggest a new direction. The Government published its long awaited NHS Constitution and David Cameron set out his thinking about the key elements of progressive Conservatism. Both of these put an emphasis on responsibility as well as choice and consumer rights. But both need more development. Last week also saw the publication of a sobering report by the New Economics Foundation, which shows just how far Britain will have to go if it is to move from unhappy individualism to become a more socially responsible society.

The aim of the NHS Constitution is to entrench the NHS in the British political settlement and to entrench citizens’ rights in the health service. It sets out a collection of legal rights, pledges and responsibilities for both patients and NHS staff. These include a right to make choices about healthcare and to information to help exercise that choice, as well as new rights in relation to vaccinations and drug treatments. The Constitution continues the process of rebalancing the power relationship between doctor and patient, so that patients are able to have greater choice.
The problem is that it is stronger on ideas associated with consumerism than in relation to individual and collective responsibility for health. When the constitution talks about responsibilities for the public it does so in the context of their being patients, rather than in the wider circumstances of preventative health care.

Likewise, whilst David Cameron’s speech sets out an interesting new framework for progressive conservatism and embraces the idea of responsibility, there are still some significant shortcomings in this approach. Cameron defined four progressive ends which he says progressives across all three parties share: fair society; equal opportunity society; green society; and a safer society. He said that what distinguished progressive Conservatives was the means which they want to use to achieve these ends, these include devolving power and responsibility to individuals and communities based on ‘nudging’ rather than regulating, the family, economic growth and fiscal responsibility. He also set three tests for deciding the appropriate policy response to future problems which reflect these means. Leaving aside the question of how these tests would have helped a Cameron government to respond to the credit crunch, there is also a wider question about what this framework has to say about the hard choices which will have to be made on public services in the future. To live up to the tag of ‘Progressive Conservatives’, the Cameron Conservatives will need to initiate a more honest discussion with the electorate about what shared responsibility will mean in the context of rising demand for public services, just when the money will have run out to pay for improvements.

The reality is that our public services face growing demand pressures, including ones which fall outside traditional institutions such as schools, hospitals and prisons. Many of these are behavioural challenges, from combating obesity to spurring ambition and social mobility through to encouraging greater civility. These are in addition to the growing cost of caring for an increasingly ageing society and the, as yet unquantifiable, social costs of the recession. Yet we know that even on the Government’s optimistic PBR forecasts public spending will need to be cut by at least £37billion in the next spending round. What we need from British politicians is a more open conversation with the public about how we are going to square the circle between society’s growing expectations of public services and the fast diminishing resources to pay for these.

Part of the answer will have to lie in accelerating public service reform, through once in a generation innovation and productivity gains. But this is also going to have to lead to a much greater emphasis on how and what individuals and society can contribute to public services. We need to move from an ethos of individual consumption to an ethic of social contribution. More personal responsibility in relation to self-regarding behaviour (health, ambition etc), greater social responsibility in relation to working together to get better outcomes from public services, and a willingness to pay for better outcomes either directly or indirectly through taxes and charges. This will build on some of the existing, but so far marginal, work on ‘co-production’, ‘co-creation’ and ‘co-payment’, but needs to be expressed in a more compelling and accessible language. The challenge for politicians is to re-frame the public debate, so that it is better aligned with economic and social reality.

The scale of this challenge is underlined in National Accounts of Well Being, a new report published by the New Economics Foundation. This found that Britain ranks lower than any other European country amongst 16-24 year olds when it comes to trust in each other and in social institutions – a reflection of just how individualistic Britain has become. But a social model built on individualism will not deliver the well being that Britain’s will want for themselves in the future. David Cameron is right to talk about responsibility and Gordon Brown would do well to start to do the same. But British politicians will have to go much further than this if they are really to help facilitate the development of a new social model based on responsibility and contribution rather than passivity and consumption.

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