NYTimes: The Republican Case Against Republican Economics


After the 2012 presidential election, key Republicans began to criticize their party’s opposition to immigration reform and gay rights. But now party reformers are questioning something much more central: free-market orthodoxy.

In an article in the May 26 edition of The Week — “What conservatives don’t understand about the modern U.S. economy” — James Pethokoukis of the American Enterprise Institute has issued an economic challenge to the right from the right.

Pethokoukis’s piece is an assault on the economic manifesto that was put out on May 16 by a conservative group that included three icons of the right: Ted Cruz and Mike Lee, senators from Texas and Utah, respectively, and Ed Meese, who served as attorney general under Ronald Reagan.

“This tired GOP sequel stumbles in its macroeconomic analysis,” Pethokoukis writes, noting that the manifesto contains “no suggestion the economy faces longer-term problems that predate Obamanomics.” Pethokoukis argues that the manifesto’s anti-tax rhetoric fails to grasp that “coping with America’s rising elderly population will require a higher national tax burden in coming decades even with a reformed entitlement system.” The conservative call for a balanced budget ignores the fact that “there is no evidence that markets fear a U.S. debt crisis.”

Pethokoukis is one of a number of conservative analysts who over the past three years have undergone something of an intellectual conversion. Michael Gerson, a speechwriter for President George W. Bush and now a Washington Post columnist, and Peter J. Wehner, also a Bush speechwriter and now a senior fellow at the Ethics and Public Policy Center, published “A Conservative Vision of Government” in the winter 2014 edition of the journal National Affairs. Their essay is an attack on the idea cherished by many Tea Party activists that all (or nearly all) government action and intervention is bad.

Gerson and Wehner criticize the domination of Republican economic policy by “rhetorical zeal and indiscipline in which virtually every reference to government is negative, disparaging, and denigrating. It is justified by an apocalyptic narrative of American life: We are fast approaching a point of no return at which we stand to lose our basic liberties and our national character.”

The two writers develop an argument rare in Republican circles. They cite the liabilities of an economic worldview that doesn’t recognize the need for government “to help those who cannot individually do for themselves, to advance justice in an unjust world, and to lift up the weakest members of society.” They go on to make the case that “many conservatives fail to see the extent to which equal opportunity itself, a central principle of our national self-understanding, is becoming harder to achieve. It is a well-documented fact that, in recent years, economic mobility has stalled for many poorer Americans, resulting in persistent intergenerational inequality.”

Conservative reformers have sparked interest on the left, but some liberal commentators remain distrustful of the willingness of intraparty insurgents to seriously challenge Tea Party commitments.

E.J. Dionne Jr., writing in the most recent issue of Democracy, contends that conservative reformers on the right “are far too timid in their approaches to economic injustice and to the structural problems in the economic system.” Jonathan Chait takes a harder line in New York magazine: “The reformers are massively understating the obstacles before them. There are reasons Republicans have fought so hard to claw back subsidies for the least fortunate. Active philosophical opposition to redistribution is one. A general detachment from the poor is another. The unforgiving zero-sum math of budgets, which means a dollar spent on helping a Walmart mom is a dollar in higher taxes or lower defense or politically painful cuts in retirement benefits, is a third. I do think the Republican reformers can nudge their party to a better, or at least less terrible, place. But I don’t think they’re being very straight about it.”

Both Chait and Dionne may be underestimating the significance of dissent among conservative policy wonks.

The Republican Party is losing crucial support in presidential elections among working class whites in the North and the Midwest.

In a prescient article published in November of 2011, Henry Olsen, a senior fellow at the Ethics and Public Policy Center, wrote that “the differences between white working-class independents and the GOP’s conservative base are becoming too substantial to ignore. The GOP base voter believes the deficit is as large a problem as the economy; the white working-class independent does not. The GOP base voter believes cutting entitlements is necessary to cut the deficit and that taxes on the rich should not be raised; the white working-class independent disagrees.”

In other words, the conservative coalition, already facing demographic challenges from the rise of minority voters, is likely to lose core white support if it maintains its dominant anti-government ideology.

Once fissures have appeared in the conservative belief system, it will become increasingly difficult to maintain hegemony – or, to mix metaphors, you cannot unscramble a scrambled egg.

Conservatism, as currently construed, faces the risk of irrelevance if it fails to address the consequences of globalization and automation, two of the most powerful forces driving the hollowing-out of the middle-class job market.

Pethokoukis points out that the Cruz-Lee-Meese manifesto fails to acknowledge that “globalization and automation are playing a role. Going forward, some economists fear a permanently bifurcated labor force with rising pay for a slice of tech-savvy workers, and stagnant wages for everyone else. It’s not all about Obama’s economy.”

Just four years ago, David Frum, still another former speechwriter for George W. Bush, was fired by A.E.I. after sharply attacking Republican refusals to negotiate with Democrats on Obamacare in March of 2010. “We followed the most radical voices in the party and the movement, and they led us to abject and irreversible defeat,” Frum declared. “Our overheated talk,” he wrote, “mobilizes supporters – but by mobilizing them with hysterical accusations and pseudo-information, overheated talk has made it impossible for representatives to represent and elected leaders to lead.”

In fact, few developments could prove more beneficial to the public at large than for the left and right to compete over proposed strategies to deal with globalization and automation. Liberals so far have been stymied while conservatives have neglected these issues.

A major obstacle facing conservative reformers is the continued support for the Tea Party within Republican ranks. An April survey by the Pew Research Center found that the percentage of Republicans, and those who lean Republican, who agree with the Tea Party is three times larger than the percentage who disagree, 33 to 11, with 55 percent saying they have no opinion.

This is a sharp decline from March 2010, when 48 percent agreed and 3 percent disagreed, but still a substantial roadblock for those seeking to shift the direction of the party.

Another major problem facing reformers is the likelihood that Republicans will do well in the 2014 elections. Stu Rothenberg, editor of the Rothenberg Report, views Republicans as slightly favored to take over the Senate; Charlie Cook of the Cook Report gives Republicans a 60 percent chance of taking the Senate. Virtually all analysts predict continued Republican control of the House. Winning will serve to mute pressure to change and fuel further ideological calcification.

These hurdles leave reformers in a difficult position: To prove their case, they need their party to fail. A Democratic victory in 2016 would open the door for Republican insurgents and provide the kind of credibility essential in politics. But conservative mutineers cannot afford to be seen or heard rooting for defeat, even if that’s where their hearts lie.

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