Neal Boortz was schlepping a lot of nonsense this morning on the radio. It was a little annoying. So it was refreshing to catch this interview with Bruce Bartlett later on in the day.
To my Republican friends: Please listen to Bruce Bartlett, and then please please start demanding that your political leaders (not to mention your facebook friends) start sounding more like him...
The other day I came across a great blog post Reagan’s gone. You’re old. Get over it which hit on a major challenge we face at the local, state, and natonal levels--the intellectual bankruptcy of the GOP:
Basically, supply-side policies work best when there is pent-up private sector demand. By lowering the cost of investment, you can unleash a self-reinforcing cycle. The bigger the pent-up demand, the bigger the payoff to an improvement in expectations. Without that pent-up demand, resources freed from supply-side measures and austerity get saved, not spent, and no self-reinforcing cycle is triggered.
The world of 1980 had tons of pent-up demand and gale-force tailwinds. Inflation and interest rates were coming down from high levels, household leverage was very, very low, financial innovation non-existent, consumption had been deferred, and demography was coiled as the baby boomers were just coming on line. On the government side, unions were powerful, price and wage controls were a reality, and tax rates were high. This was the ideal set up for supply side reforms.
Fast-forward to post-2008. Whatever the opposite of pent-up demand is, that’s what we have. Inflation and interest rates are already low, household leverage is a major burden, consumption was pulled forward during the boom, and demography is no longer our friend. Plus, we have globalization acting like a supply shock to our labor pool, holding down wages. In short, the tailwinds are now headwinds. On the government side, unions are far less powerful today, there are no price and wage controls, and tax rates are low. It seems next to impossible to make the case that supply-side policies can have anywhere near the effect today that they had in the 80s.
Yet, so many still do. Much of our body politic is stuck—along with the bulk of the baby boomers—in the 1980s, still trying to relive those old battles in the rear-view mirror. The US has changed. The world has changed. The problems have changed. The emerging world is rapidly plugging into the grid, hungrier and willing to work for less. We need to be pragmatic. Adjust and compete. Look around the globe and without preconceived notions and see what we can learn from others. Being stuck in the same old big government/small government debate keeps us from doing this. Sometimes supply-side policies are right and sometimes they’re not. Sometimes Keynesian polices are right, sometimes they’re not. Until we approach policies as tools in a toolkit and not as divine scriptures, we are going to be stuck in an ideological logjam, wasting precious time. Time to get off the ideological paradigm.
The inability of GOP elected officials to engage on actual economics rather than Grover Norquist pledged indoctrination is a major political hurdle.
The paradigms of small government vs. big government, taxes are bad, Obama and the Democrats are Socialists, et al (not to mention the Keynes hobgoblin) that every single GOP politician and activists trots out day in and day out is destroying the policy discourse in this nation and running the state of Georgia into the ground.
Basically, as Mak Dow in the post above argues, the GOP rank and file are stuck using talking points based on economists debates of the 1980's. I think he has a point.
Democrats runnning around and saying, "nun uh..." to all of this will never change the political landscape because people won't believe them. Until those who vote GOP start openly calling out their friends, neighbors, and local politicians on this bullshit we will have a broken democratic process.
To my Republican friends, you don't have to start liking everything that (center-right friend to the 1%) Obama is doing and saying. But when you critique him, ignore all the bogus platitudes of @TalkMaster and his legion of redneck reactionaries and start listening to the likes of Bruce Bartlett, Mark Dow, or the smart folks over at Bleeding Heart Libertarian.
We will all be better for it.