Making policy for a low-trust world

Effective ideas meet a simple test: "It does exactly what it says on the tin."

The United States of America has become a country with low and falling levels of social trust. This is in some ways a rational response to elite failures, in some ways an inevitable consequence of the public becoming better educated, in some ways an unavoidable side effect of better information technology, and in some ways a deplorable thing that we should try to reverse.

But something I’ve become increasingly convinced of is that policymakers need to acknowledge that it’s a real feature of the landscape and adjust their decision-making accordingly.

In particular, they need to adjust it in an appropriate way. A very large share of the people involved in politics and government are lawyers, and their lawyerly instinct about the problem seems to be that you need to layer on more layers of process. If people are worried about the discretionary use of power, you need to make sure the decision-makers go through an elaborate compliance checklist. But as Princess Leia tried to explain to Grand Moff Tarkin, “the more you tighten your grip, the more star systems will slip through your fingers.”

When you try to address low trust through compliance, you end up where Andrew Cuomo is — he’s creating an elaborate checklist for vaccine prioritization which is hard to follow, so he’s ramping up penalties for people who don’t comply, which is slowing vaccine administration and further eroding trust.

But the same basic problem pops up everywhere from fiscal stimulus and quantitative easing to bike lanes.

The correct way to respond to a low-trust environment is not to double down on proceduralism, but to commit yourself to the “it does exactly what it says on the tin” principle and implement policies that have the following characteristics:

  • It’s easy for everyone, whether they agree with you or disagree with you, to understand what it is you say you are doing.

  • It’s easy for everyone to see whether or not you are, in fact, doing what you said you would do.

  • It’s easy for you and your team to meet the goal of doing the thing that you said you would do.

That’s not a guarantee of political or policy success. Maybe you will pick terrible ideas and be a huge failure anyway. But this triad for success under conditions of distrust at least creates the possibility of success, where people will look back and decide that what you did worked. Committing yourself to that triad may involve some waste and inefficiency relative to a more theoretically optimal scheme with more means-testing.

And it will almost certainly involve a bit more high-handedness and less community consultation. But it allows you to establish yourself as conditionally trustworthy in the sense that your policies do exactly what it says on the tin. And if you pick policies that work, you’re then in a position to rebuild trust as people see that confidence in you is rewarded.

The vaccine prioritization fiasco

In my December 18 post, “Give The Vaccine To The Elderly,” I argued in favor of a pretty strict age-based prioritization system primarily because that would be a transparent and easy to implement mechanism.

As I researched it, I came across the fact — which has been flagged by others as well — that the Advisory Committee on Immunization Practices was recommending a more complicated scheme in part on racial justice grounds. Because everyone loves culture war arguments, this became a huge controversy and several conservative states like Texas made big shows of rejecting the Social Justice Warrior concepts. That’s fine, but unfortunately, they did not accept the wisdom of implementing a transparent and easy to implement mechanism.

Instead, operating under the principle that everyone wants to be vaccinated in Group 1 they have divided Group 1 into three subgroups — 1A, 1B, and 1C. But then Group 1A is subdivided into two separate tiers, and we’re still awaiting word on how Group 1C will be subdivided, to say nothing of Group 2 or Group 3.

So while New York and California, with their presumably more social justice-inflected vaccine distributions, have managed to disburse only 31 percent and 28 percent of their vaccine doses (I’m going by New York Times data), Texas and Florida, who made a big deal of rejecting ACIP, are not doing much better at 36 percent and 31 percent. The very worst performances are in Kansas, Georgia, Arizona, Mississippi, and Idaho, so there’s clearly a lot more afoot here than pure partisan politics.

And in many ways we still haven’t gotten to the real pain point of prioritization systems, which is going to be where people with “at least one chronic medical condition” get to cut the line. In the abstract, of course if you’re 52 and have a bad heart then you need the vaccine more than someone who’s 64 and in perfect health. But in practice, this means you are allocating vaccines not based on actual population health, but based on who is in possession of a note from their doctor.

The system, as implemented, will not do what it says on the tin. As people notice that, they will become more aggressive about wanting to cheat the system. And as backlash builds, pressure will build for tighter enforcement, which will further slow down administration.

A pure age-based system — “show up at CVS or Walgreens and they’ll give you the shot if you’re over 75” with the age cutoff steadily dropping over time — is not perfect. But it’s really easy to check people’s IDs, the rich and powerful have no good way to game that system, and the smooth operation of the system itself will build trust.

Checks for everyone

I cover American public policy professionally, and I would have trouble explaining to you exactly how the Paycheck Protection Program works.

Formally speaking, it’s a Small Business Administration loan guarantee program rather than a direct payroll subsidy like many European countries did. But when you peak under the hood, one of the key advantages of the PPP loan is that it will be forgiven if you meet certain criteria, including not laying off your employees and using the money for certain specific eligible expenses.

Because the program is complicated, it’s generated an endless series of compliance complaints:

  • Because it’s supposed to be a small business program, a whole genre of journalism emerged complaining that too much PPP money was going to bigger companies — but of course, bigger companies employ more people.

  • Because it’s supposed to be a loan program but in practice a lot of the loans are forgiven, you get complaints about monetary losses to the government.

  • Because you’re allowed to accept a loan without applying for full forgiveness, some PPP recipients got money and did layoffs, generating complaints that it didn’t really protect payrolls.

And on top of all that, there were significant administrative burdens associated with the program which generated a lot of complaints from business owners, the very people who are supposed to be enthusiastic about PPP.

Instead, a myth developed that the government — which put hundreds of billions of dollars in small business assistance on the table — was barely doing anything.

Fundamentally, I would say that the problem with the program is that it didn’t do what it says on the tin, in part because it’s not at all clear what it said on the tin. It seems to have started with the thought that the Fed keeping interest rates low was helping big businesses because they could sell bonds to ride out the pandemic, so there should be a comparable lending program for smaller companies. But if the government is going to help out smaller companies, it should make sure that it’s actually saving jobs. And if we’re going to give companies loans to maintain payroll, but they’re often not going to be able to pay the loan back, there should be loan forgiveness. In the end, Congress backed itself into something that was a lot closer to a European-style payroll subsidy program than to a loan program, but with most of the trappings of a loan program.

By contrast, sending $1,200 to almost everyone was seen as a huge success, and sending more checks is wildly popular.

The checks did what they said on the tin. They didn’t attempt to distinguish between the deserving and the undeserving. They didn’t specify whether you had to use the check to make rent or could just blow it on a new iPhone. And they also didn’t attempt to address any particular racial social justice concerns. Critically, they didn’t claim to do any of these things. The only claim was that almost everyone would get some money, and they did.

QE for the people

A policy from the Great Recession that really flunked the “what it says on the tin” test was quantitative easing.

I think if you really understand how monetary policy works and have confidence in the Federal Reserve staff, then you’ll see that having the Fed buy a bunch of longer-term bonds is really not that exciting or weird. But most people don’t.

And unfortunately, as you become better-informed about monetary issues, it doesn’t actually become that much clearer why the Fed decided this would be a good thing to do. During a funny 2014 Brookings appearance, Ben Bernanke quipped that “the problem with quantitative easing is that it works in practice, but it doesn’t work in theory.”

But think about that in terms of a low-trust society; the guy we’re supposed to trust to do the QE himself says he can’t give an explanation of how it works.

If you’re an insider to macroeconomic policy discussions, Bernanke’s quote is funny. But I think given all this, it’s understandable that you ended up with a coalition of libertarians and left-wing people and goldbugs masquerading as left-wing people out there arguing that QE was a giveaway to rich people.

Central bankers have traditionally preferred to work in the shadows, quietly stabilizing the macroeconomy without being seen as an inconvenient element of central planning in the capitalist economy. That leads them to like measures like QE precisely because they are opaque and work indirectly. But in a low-trust world, that’s bad. People don’t see quiet public servants plugging away in the background, they see shadowy conspiracies.

But here’s the good news. The downside to relying on flat universal checks as your means of digging out of a recession is you end up needing a lot of money because it’s not particularly targeted. That means a lot of debt, and debt is scary. But the Federal Reserve could create the money and send it to people directly rather than creating money and using it to buy bonds. That would be monetary policy that does exactly what it says on the tin — we created a bunch of money, and now you have a bunch of extra money.

Fix the damn roads

Here’s Alon Levy describing the “trust before streets” manta that is currently paralyzing urban governments across America:

The trust before streets mentality, as currently used, means that the state has to first of all establish buy-in before doing anything. Concretely, if the goal is to make the streets safer for pedestrians, the state must not just build a pop-up bike lane or a pedestrian plaza overnight, the way Janette Sadik-Khan did in New York, because that is insensitive to area residents. Instead, it must conduct extensive public outreach to meet people where they’re at, which involves selling the idea to intermediaries first.

This is always sold as a racial justice or social justice measure, and thus the idea of trust centers low-income areas and majority-minority neighborhoods (and in big American cities they’re usually the same – usually). Thus, the idea of trust before streets is that it is racist to just build a pedestrian plaza or bus lanes – it may not be an improvement, and if it is, it may induce gentrification. I’ve seen people in Boston say trust before streets to caution against the electrification of the Fairmount Line just because of one article asserting there are complaints about gentrification in Dorchester, the low-income diverse neighborhood the line passes through (in reality, the white population share of Dorchester is flat, which is not the case in genuinely gentrifying American neighborhoods like Bushwick).

There are three basic problems with this and they all intersect:

  • People want different stuff. “The community” is not an actual individual that can make choices.

  • Normal people lack the technical competence to make judgments about what street features will have what impact; there’s more to life than pure technocracy, but these are issues with a significant technical element.

  • The people who show up to community meetings and yell about things are an unrepresentative minority.

The result of spending a lot of time gathering incoherent feedback from an unrepresentative group of people who don’t necessarily know what they are talking about is that you end up (slowly) doing things that either don’t work well or aren’t cost-effective. This leaves everyone feeling like the city is run by idiots and only further erodes trust.

By contrast, if you do something in a timely and cost-effective manner and it delivers beneficial results, then people might give you some credit and you’ll earn trust for the future.

Of course, if you bypass community consultation and do something that turns out to not work, you’ll look like an idiot. But if your departments of public works and transportation are staffed by people who don’t know what they’re doing, that’s the problem, not a lack of community trust. After all, the community shouldn’t trust you if you don’t know what you’re doing. The point is that there’s no magic process that makes this work. What you need is a team that is worthy of trust, then it needs to act like it deserves to be trusted, and then it needs to deliver something good.

Don’t deliver something over budget and behind schedule that turns out not to work well and then congratulate yourself on your community outreach.

The era of the mass expert

My hope is that if policymakers take the phenomenon of low trust seriously, they will be able to design policies that actually bolster trust.

But part of taking it seriously, I think, is to recognize just how much the world has changed. In the 1950s and 1960s, most people hadn’t finished high school and college graduates were a tiny elite group.

Elites at that time were less educated, too. But the change there is smaller. William McChesney Martin didn’t have a PhD in economics the way most recent Fed chairs have (Jay Powell has a JD), but he did several years of grad school at Columbia before World War II. So the gap between the elite and the masses has just narrowed a lot — today’s “working class” defined in educational terms is people who would actually have been in the top half of the educational distribution back in Martin’s day, and you have a huge mass constituency of college graduates.

That combines with a very open media ecosystem where it’s just inevitable that anything that happens will end up subject to scrutiny, some of it crazy and some of it sophisticated and almost all of it coming from people who feel that they are qualified to participate in serious discussions. Today’s elites seem less remote, less mysterious, and less impressive. They also aren’t coming off the back of leading the country to victory in a World War, and they are navigating a landscape with much more polarized politics and much higher expectations from historically marginalized people.

The temptation is to respond to that by taking refuge in process and complexity.

But fundamentally, it doesn’t work. And beyond that, trying to turn everything into a giant national community meeting where we address everyone’s concerns really isn’t going to work. A much more realistic goal is for policymakers to be able to say they clearly achieved what they set out to achieve. We said the buses were going to go faster, we made this change, and now they are faster. We said you’d get $2,000 and now you have $2,000. We said you could get a shot if you were old, and now you’ve got your shot.

And I think this applies to other areas of policy. “There’s going to be a government program that covers people’s medical bills” has a lot more does-what-it-says-on-the-tin power than “we’re going to set up a system of regulated, subsidized exchanges where….”

Of course, even if you pick a goal, hit your goal, and are clearly seen to have hit your goal, that’s no guarantee that everybody will like it. But that’s fine. It’s a democracy. If the voters decide they want something else, then they’ll get something else. But with clear, well-defined, and achievable goals, you at least have a fighting chance of success.