Why it's so hard to create new economic policies in the U.S.

Ever wonder why it's so hard for the United States to make new public policies -- particularly economic ones -- while it's relatively easy for European nations to do so?

One big reason is the sheer diversity and size of the United States. Culturally speaking, the United States can be seen as three nations, not one. I'd like to take credit for the theory, but it was first formulated by the late Daniel Elazar, a political scientist who wrote American Federalism, A View from the States.

I've adapted Elazar's framework below to provide a slightly different take on the United States' policy landscape, one which may further help explain why it's so hard for the U.S. to agree on economic policies in good times and bad.
In this framework, the U.S. has three distinct economic cultures: the Northeast, which I'll call "The Enlightened," the South, called "The Morals," and the West, called "The Mavs," short for 'mavericks.'

Although the three cultures have overlapping values, many values are in conflict , and it's this clashing of values, particularly economic ones, that often stalls and prevents effective public policy.

Briefly, The Enlightened favor most classic liberal public policy options, The Morals oppose most of them, arguing that they have the more virtuous value system, and The Mavs, encompassing socially and environmentally liberal Americans who might also be economically conservative, are free spirits and political independents with an outlook that's at home on the (urban) frontier.

Two other factors that make it hard to pass economic policies in the U.S. are the U.S. Constitution and the anti-state political culture. The constitutional system separates power; conversely, Europe's parliamentarian system concentrates power, making it easier to get things done. The U.S.'s anti-state political culture means Americans generally want and expect economic issues and problems to be resolved in the private realm, not the public realm. In the United States, it is always private sector first, public sector second, at least in terms of ideology.

Now, the 'three nations' theory does not hold that there aren't moral citizens in the East, or enlightened citizens in the South, or that free spirits are only found in the West. But it does hold that these ideologies are the dominant outlooks in the regions, they frequently clash, and the clashes stall public policy.

And one doesn't have to look far to test the theory: we're seeing it play out right in front of us in the current federal universal health care debate.

Financial Editor Joseph Lazzaro is writing a book on the U.S. presidency and the U.S. economy.

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