The New Republic calls it his “new theory of the state.”
Obama has set out to synthesize the New Democratic faith in the utility of markets with the Old Democratic emphasis on reducing inequality. In Obama’s state, government never supplants the market or stifles its inner workings–the old forms of statism that didn’t wash economically, and certainly not politically. But government does aggressively prod markets–by planting incentives, by stirring new competition–to achieve the results he prefers. With health care, for instance, he would make it easier for employees to tote their insurance from job to job, eliminating the disincentive for insurers to invest in preventive care. Or take his bank plan, which helps banks dispose of their toxic assets, reducing uncertainty and making the banks more attractive to private investors–a far less drastic step than nationalization. Rather than force markets to conform to his wishes, he shapes their calculus so they conclude (on their own) that their interests coincide with his wishes.
The “-ocracy” label is about as unpopular as libertarianism and paternalism, so the term joins a proud, long tradition. The full piece is here.
Tags: Barack Obama