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The Challenges of Messaging: Political Economy Version

Recent talk about the lack of popularity of health care reform -- which may improve post-SCOTUS ruling -- got me thinking about the challenges of explaining and winning public approval for complex economic and social policies.
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[This is MUCH longer than the usual post. That's because a) I have only an internal editor and he loves every line!, b) it's too hot to go out and play, c) I've thought a lot (too much?) about this. Still, I think many will find it interesting, albeit long winded.]

Recent talk about the lack of popularity of health care reform -- which may improve post-SCOTUS ruling -- got me thinking about the challenges of explaining and winning public approval for complex economic and social policies.

Like others in my field, I spent years learning about economics, statistical analysis, social policy, budget accounting, financial markets, health care systems, and so on. Hundreds of course hours, papers, tests, seminars, years working on a dissertation. But the concepts of messaging, framing, even polling, almost never came up. To the contrary, economists are taught to be pretty dismissive of polls -- "it's what people do that matters," I recall a prof saying. "Not what they say."

And yet, years later, I found myself working for the Obama administration, trying to explain the Recovery Act -- the stimulus -- to the media and other audiences that were not much moved by Keynesian theory, counterfactuals (what would have happened in the economy had we not implement the stimulus), or statistical evidence.

I recall one press briefing on the Recovery Act -- the daily gaggle with Robert Gibbs in the White House press room -- with about 40 reporters. It seemed to me that virtually every one of them was convinced that I was trying to pull one over on them and damn it, they weren't going to let that happen.

I'm not naïve, and I know that I wasn't there to teach an economics lesson. But I did, as one does in those settings, present a set of facts, evidence, forecasts, and modeling results, with what I hope was clarity and not spin. That is, I obviously wasn't trotted out to say what was going wrong. I was there to explain how we thought -- how the evidence suggested -- that the stimulus was helping to pull forward the recovery in GDP and lessen the rate of job losses compared to what would have happened otherwise.

That, of course, turns out to be very tough to explain. People basically know two things: you did the stimulus and the economy's still sick. Therefore, it didn't work.

Before (I did a stint for the Clinton administration too) and since, I've thought a lot about messaging, by which I mean explaining to the public what it is you're trying to do with public policies in ways they'll understand and support. Of course, you don't expect everyone to support everything. But what I'm thinking about here is how do you explain and garner support for policies that are intended to further the public good in ways that are not always obvious?

That is, I'm not talking about tax cuts. Those are easy to sell. Nor am I talking about presenting/spinning bad news. Part of the job is going out in front of the TVs after a jobs report, for example, that says the economy shed hundreds of thousands of jobs last month. How you do that effectively is a very interesting question, but not one for this post. (Short answer: acceptance, diagnosis, prescription; you just have to genuinely accept the bad news, try to explain why you think it's happening, and how you're trying to correct the underlying problem; if part of the problem is Congressional blockage, that's part of the diagnosis, but you have to own the problem).

I'm talking about things like the Recovery Act, the ACA, the bank or auto bailouts, Dodd-Frank, the President's budget proposal; all policies that share these characteristics:

- They're inherently complex in that they deal with systems with many moving parts (compared to, say, college tuition assistance);

- It's not always obvious who they help and how they help them -- they pose the question: "what's in it for me" (ACA);

- Or, they help unsympathetic folks (the way the TARP helped the bankers);

- They invoke harsh partisan opposition (doesn't everything? No -- think of tax cuts or the recent interest rate subsidy on student loans);

- They're good for society and the economy but not in ways that are at all obvious; in fact, in some cases -- like the Recovery Act -- the make something bad (a deep recession) less bad. They don't make it all better.

So, with those characteristics in mind, here are some general principles I've learned, though I guarantee you I've got a lot more to learn about this. That's what makes it so interesting and challenging.

Normal People Don't Do Counterfactuals: This one's obvious. "According to my economic model, it would have been worse," doesn't reach people. That doesn't mean you totally punt. The fact that independent validators, including the CBO, had that same finding re the impact of the Recovery Act has made a difference, I think. But just a small one.

So how do you sell stimulus? Break it down. Polls were consistent on this point: the "stimulus" polled poorly; preserving teachers' jobs, repairing our infrastructure, and tax cuts (which comprised a third of the thing) polled very well.

Most importantly, and like everything else here, I'm employing 20-20 hindsight, don't frame it as making everything all better. The simplicity of "the patient is sick, this will make her better" is tempting, but it's not true. The correct message around stimulus is "our economy has been deeply wounded. Creating jobs for teachers, fixing our neglected infrastructure (give e.g.'s), and putting more money in people's pockets will help offset some of the pain. But it won't make it better. For that, the only medicine is time. As that time passes, our job is try to help folks where we can."

Macro Efficiency Gains Are A Lot Less Exciting than Me and my Friends Think They Are: A journalist asked me the other day why we did health care at all when the economy was in such bad shape. There's the obvious "walk and chew gum" answer, but the fact is that health care in the United States is just so damn inefficient, and economists hate that. See the first figure here, for example, showing what an outlier we are on per capita spending compared to all the other advanced economies. And without better outcomes.

That is clearly unsustainable, yada, yada...but we're talking about messaging here. To an economist or a president who cares about our fiscal future "bending the cost curve" is a bit of a holy grail. To a regular person, it's confusing and hard to connect with. The message that slowing the growth of health care costs is essential to our fiscal survival and the global competitiveness or our businesses is absolutely true and even the audience at a CAP seminar.

Like the counterfactuals above, it doesn't mean you leave this out of the message. But you don't lead with it.

So what do you lead with on health care reform? See "what's in it for me?" below.

Same with Macro Statistics: To me, one of the best, simplest pieces of evidence that the stimulus was effective is the fact--FACT!--that real GDP was cratering at a 9% annual rate in the quarter before the plan was implemented (2008q4) and was rising at 2% by the second quarter of 2009.

[Sidenote: the actual rates were -8.9% and positive 1.7%, so I'm rounding...when messaging with statistics, unless you've got a good reason not to,* round off, will ya please!? A) you alienate people with unnecessary precision, and B) this is econ, not physics--there are wide confidence intervals around much of our data--no need for false precision.

*An e.g. of when it's necessary: the unemployment rate, where a decline from 8.1 to 7.9 is useful in messaging...and statistically significant!]

And up to a point, a statistical swing of that magnitude, from horrific nightmare to slow growth, makes for compelling messaging. But only up to a point.

I think what really matters to people in terms of the macro developments is a) what it means to them, and b) the trend. 'A' is obvious but there are nuances. For example, the idea the GDP is rising, as it was by 2009q2 and has been since, is a lot less relevant to the middle class in an era of such highly elevated inequality, where GDP growth for them is too often a spectator sport. A strong jobs number, on the other hand, is a lot more viscerally effective.

But the trends actually matter a lot in messaging. Basically, when it comes to the economy, for most of us, it's a little like the weather. We had what amounted to little hurricane here in Northern VA the other night, and I started feeling relief not when it was over, but when the worst of it was clearly past. If the macro-indicators show improvement, messaging around that theme can be important. But there's a very big caveat coming next.

Don't Call Turning Points! Why, for Keynes sake, would you shout that the economic coast is clear when you're not quite certain that's the case? The downside to getting this wrong is huge -- the media will trounce you and you'll lose credibility with the public, who will view you as just "talking your book."

If you think things are improving, it's important to message around that as just noted re trends. But with great caution, even a dose of pessimism, because there's great messaging upside to having things turn out better than you said they might.

The fact is, at any point that looks like an economic turning point, you're always a step away from a banana peel and you should message accordingly. As a White House economist recently put it last time we were discussing some improving statistics, "yeah, everything's looking good until it isn't."

That's the mantra you want to keep foremost in your mind when you're developing messages at what look like positive turning points.

Making it Personal Is Not the Magic Bullet (but it does guide the way): It is conventional wisdom that you sell your policies by telling individuals' stories. Health care reform is the obvious example, where truly compelling stories about real people being denied coverage for themselves or their kids, for example, because they sick, makes for strong messaging. Even less obvious cases, like messaging financial market reform with people who've been screwed by unintelligible fine print on their credit card statement, are thought to be great fodder for messaging.

But are they really? I'm absolutely sure they're part of the solution, but maybe not as large a part as is often thought. What I think I've seen here is that individual cases tend to be too granular. We all hate the fine print on our credit card or cell phone bills, but very few of us think much about it. Similarly, we deeply like and instinctively get the importance of forbidding insurers from discriminating on the basis of pre-existing conditions, or dropping coverage when it's needed. But, thankfully, that's a rare occurrence.

So while I'm sure it's critical to tell these stories, it's equally if not more important to be guided by these personal insights to a larger truth. For example, there are two underlying, and quite emotive, themes in play re this insurance example: risk and fairness. It's part of the human condition to worry about really bad things happening to us, and even more so to our kids. So we insure against them. The idea that it's OK for a business to either deny you from doing so or to drop your coverage when you really need it is thus existentially scary and deeply unfair.

So, while starting at the most granular, individual level is smart, you can't stop there. The messaging then, if possible, must extrapolate to broader, deeply held concerns.

What's In It For Me? This is obviously key, but it's harder than it looks, especially with policies like health care, the Recovery Act, and the bailouts.

Re health care, David Leonhardt covered it thoroughly here and I can tell you this was widely read around the White House. A big part of the challenge relates to the "people-are-less-wound-up-about-inefficiencies" point made above. The fact that a big part of the unsustainable spending in health care is "invisible" to consumers--very few of us directly face the price signals generated by wasteful treatment--means that messaging around them won't generally resonate. It's actually worse--try to do something about this waste in the system and it's easy for opponents to start blathering about social engineering and death panels.

It's much worse with the bank bailouts. Here, the messaging has to include some economics, specifically the role of credit, and you have to tie it to Main Street. I can't think of much good messaging around bank bailouts, but the best you can do is draw a direct line from a crashing Lehman Bros to the inability of the Joe's Hardware to roll over their debt and restock their inventory.

The other messaging here has to be around accountability--how the bad guys will suffer. Instead, they got bonuses and Jamie Dimon, fighting aggressively against fixing the problem while presiding over the loss of billions, is touted by the Congress.

In such cases, it's useful to study effective messengers, like Barney Frank and Elizabeth Warren. What works for them is that they well understand the role of financial markets in everyday lives but their main emphasis is on accountability.

That's the key here. If the answer to "what's in it for me" isn't obvious (e.g., contrast the bailouts with help paying for college, better roads, higher after-tax income, etc.), then the message should emphasize that what's in it for average folks is this: someone who's breaking the rules and raising risks and costs for the rest of us is solidly in your target.

Whether it's an insurance system that's not playing fair or a financial player who's ripping people off, what's in it for you is someone who playing the rest of us for chumps is going to be stopped.

But of course, for that to work, it's got to be real. In the ACA, regarding insurers, it is, and that's where I think messaging has been and will be most effective. All we want to know is that we can insure against the risk of something bad happen to us and our families in a way that's fair and affordable. Beyond that, I'm not sure much else will resonate.

Re the banks, there's this sort of thing on how the actual costs will turn out to be way less than people think, which is true, important, and at least marginally helpful. But really, the less said the better.

People Aren't Stupid; They Are Distracted: I'm sure it's not hard to find statistics that frighteningly large shares of Americans believe the President's an alien or disbelieve evolution, etc., but--and here I'm being horribly anecdotal--I've got a bad habit of talking political economy with strangers the world round, and I'm talking cabbies, clerks, the guy unfortunate enough to end up in the La Quinta exercise room with me--not my fellow conferees at the university seminar.

What I uniformly find is that people are not at all disinterested or even that terribly uninformed. It's that they don't have the time or interest to go down into the weeds, so they try to capture the essence of the important political economy issues with a phrase that captures what they view as the essential truth.

Around fiscal matters, for example, I hear a lot of, "look, you can't spend more than you take in." Or "we can't afford the entitlements." Or the kind of stimulus sentiments noted above ("we tried it-things got worse").

It feels unsettling to people to walk around not understanding important things that matter in their everyday lives. That is, we're OK walking around not understanding quantum physics, but not so with stuff that directly affects our living standards, like access to affordable health care, jobs, paychecks, schools, etc. So to dampen the anxiety of uncertainty, I've found people reduce the tough policy questions to something almost like aphorisms--simple truths that make sense to them.

The messaging thus needs to respect and tap that. Speeches that go on for too long are ill-advised. Instead, a good speech these days is like an inverted cylindrical cone. It starts at the wide end, explaining why something like the ACA is important--why the system doesn't work right now, and how the market can't get this right on its own--and ends up with a simple resonant sentence about what this is really about is making sure you can take care of yourself and your family in a way that's reliable and affordable.

When it Comes to Government, You've Got to Meet People Where They Are: In another lifetime, I used to be a social worker, and the instruction I remember most from those days is "you've got to meet the client where she is." If you can't put yourself in some else's shoes, your message isn't likely to reach them.

In messaging around political economy, this is especially important to people like me, who recognize a role for government in a world where market failures are prevalent and prominent. Um...not everybody feels that way.

Many, if not most, view the federal government as a dysfunctional mess, a place where your hard-earned tax dollars go to die. And of course, many in politics fulfill that prophecy in ways that ensure government mistrust will remain strong. It's a strategy as diabolical as it is effective: "government is broken: vote for me and I'll keep it that way!"

The problem is that too many Democrats have overlearned this lesson. They think that because there's a strong anti-government strain in the ether right now, they too should run against government, or at least not for it. They think they should kowtow to the magic of the private sector, as if that part of the economy always works perfectly.

In fact, it is here that D's have a natural messaging advantage, if they're willing to get the balance right and meet people where they are. And where is that? The fact is that most people recognize a central role for government in certain, prescribed areas: things like retirement security (even Tea Partiers!), health care, public goods (parks, infrastructure, education, safe food and water), and regulating excessive power.

President Obama has been framing this correctly, IMHO, in recent weeks, particularly in this Lincoln paraphrase he's been using of late, that "through government, we should do together what we cannot do as well for ourselves."

The opposition runs from this, and they can and should be framed as advocates of YOYO economics ("you're on your own"). If Democrats can't make a simple, convincing case that there are key areas where "we're in this together," then they all need to go meet somewhere and not come out until they can do so.

But wait, you say--doesn't such messaging bump right into the skepticism and actual dysfunction that I myself stressed a moment ago? Yes, and that too should be turned into an advantage.

The key word here--key in both messaging and in actual governing--is compromise. At a gut level, people know two things about this question of government, 1) they need it to perform the roles noted above, and 2) the current system is at serious risk of not being able to perform.

D's need to acknowledge this gridlock and give simple, concrete examples of ways in which the opposition's refusal to compromise is threatening the ability of government to do what people need and want it to do. The messaging simply describes what government needs to do because markets won't, and then should not hesitate to point fingers at those who are standing between all of us and these critical functions.

Really finally, another sidepoint here: shoutfests, of the type I myself sometimes get into on cable TV, feed the problem. When viewers hear people arguing about government policies in ways that are unintelligible and uncomfortable--talking over each other, shouting each other down--it feeds right into their sense of dysfunction, confusion, and frustration. It may help ratings in the sense that some folks would prefer a fight to a measured discussion about tax policy, but in terms of getting back to good government, it's counterproductive.

OK, enough for now. But I'll try to reference these points in forthcoming posts and I encourage readers to share good examples of the above.

This post originally appeared at Jared Bernstein's On The Economy blog.