‘Foolish Consistency’

Paul Krugman says:

Prodigal intellectuals: So I see Richard Posner has decided that modern conservatism is intellectually bankrupt. And Bruce Bartlett has a new book saying it’s time to let go of Reagan.

At one level it’s good to see decent people showing some intellectual flexibility (Bartlett, in particular, has always come across as someone with whom one can have honest disagreements.) And yet — why, exactly, should we listen to people who by their own admission completely missed the story? I mean, anyone who actually listened to what Newt Gingrich and Dick Armey were saying in 1994, let alone what passed for thought in the Bush administration, should have realized long ago that if there ever was an intellectual basis for modern conservatism, it was long gone. More here »

Bruce Bartlett emails:

Paul Krugman says nice things about me.

I posted a comment that has not yet appeared saying that Washington tends to enforce a foolish consistency. If you are someone of some prominence whose views are known publicly, then everything you have ever said in the past tends to be projected forward and everything you say today is projected backward. Any discrepancy potentially brings charges of flip-flopping or hypocrisy or selling-out or whatever. Certainly, these charges are valid in many cases, but the simple possibility that circumstances have changed or that experience or new evidence has caused one to change one’s mind seems never to be seriously entertained. The result is to force people to stick with positions they know are wrong because they less fear being foolishly consistent than being attacked for flip-flopping.

Part of this is the clash of economic and social conservatism and the inherent conflict between the two groups within the GOP. Social conservatives are anything but anti-government no matter how much they might want you to think otherwise. Gary Becker highlights this:

Its support of competition and private markets, and hostility to sizable regulations, is a direct descendant of the classical liberal views, as espoused for example in Smith’s Wealth of Nations. … To such conservatives, the present US government’s management of the American auto industry is an invitation to disaster… Classical conservatism would recognize that the intervention of the Fed and Treasury in the finance sector may be necessary, given the crisis in that sector, but classical conservatives would look for this involvement to end as soon as possible.

The other pillars of modern conservatism are aggressive foreign policy to promote democracy in other countries, and government actions to further various social goals, such as fewer abortions or outlawing gay “marriage”. These views fit less comfortably in the conservative tradition that is hostile to big government and skeptical about the use of government power to override individual decisions. Classical conservatives would argue that governments are no more effective at interventions internationally or on social issues than they are on economic matters. So governments should usually not get involved in such issues…

The … Republican Party under the leadership of Eisenhower and Reagan had a more consistent classical conservative philosophy… Neither Eisenhower nor Reagan was particularly religious, and they did not have strong views about gays or abortion rights. The shift in the attitudes of the Republican Party toward more interventionist views on social issues, and to some extent also on military involvement to create more democratic governments in other countries, has created this crisis in conservatism.

But is that all it is, the inevitable clash of a coalition within the GOP with very different views about the use of government to promote social issues and democracy, a clash currently being won by the Rush Limbaugh wing of the party?

I think it’s more than that. It’s also the view that the party has been captured by the rich and powerful, that the party’s interests do not include the typical household. For a long time the GOP could claim that what was good for rich, white, powerful males who dominated the financial industry, or industry more generally, was good for everyone, working class and rich alike. Ideas like “trickle down” economics expressed this directly, but so does the view, for example, that if we raise taxes the rich will flee to another country leaving us helpless and unable to respond with creative innovations to a changing, dynamic world. If the rich leave the country, where will that leave the working class? Without anywhere to work, or so the story goes. Where would we be without our rich overlords to provide for us?

When everyone was doing well during the bubble – jobs were plentiful, housing and stock prices were going up, etc. – it appeared that everyone was sharing in the bounty. Sure, the rewards were unequal, and the reality was that although we were near full employment, wages were stagnating for the middle class, but that’s not what we heard about during this time. Rather it was all about our dynamic, flexible, wonderful, laissez faire economy. If you were stuck in a dead end job, did not own a house, did not have 401ks for retirement to capture your share of the wealth, and so on, why that was your own fault, your own lack of initiative. The opportunity was there, you just had to knock on the door, and if you didn’t, then that is your problem, not a problem with the system (of course, in reality we are a less mobile society than much of Europe, but the popular belief was otherwise).

But it all came crashing down when the air came out of the housing bubble. The crash in housing prices, stock prices, job markets, etc. made it clear that wealth hadn’t been shared after all, it had been distributed upward, massively, and the bailout that was needed – a bailout that would fall on households – would only make that worse. The idea that free, unregulated markets where the rich and powerful were left alone to do their economic wonders for the world began to be revealed as a false promise. After the crash, the typical household was no better off than it had been decades before, many were worse off, and given the uncertainties before us it’s not clear when that will change.

The political consequences of the realization of these false promises has been large. Arnold Kling explains why he thinks the GOP is in big political trouble going forward:

1. The larger Hispanic population poses a challenge for Republicans.

2. For the next few years, the Federal government will dominate the economy as never before. Corporate leaders will come to realize that it is a business necessity to support Democrats financially and to co-operate with them in terms of public relations (for example, the health care trade groups promising to help President Obama with health care costs).

3. As I recall, the Senate elections in 2010 will have more vulnerable Republican seats, so that the Republicans should be deeper in the hole for 2012 and 2014. More here »

The Republican party will be back. It wasn’t all that long ago that I was very unhappy with the voices representing the Democratic Party. In my view, they were too far left, too shrill, too anti-market, and they were driving away voters in the middle of the political spectrum. I wanted new voices, new faces representing the party in the media – I thought our Limbaugh equivalents were hurting us – and the outlook I had for the party was as grim as it appears to be for Republicans right now. (I should note that my own views have shifted a bit and the voices I once heard as unreasonable – particularly on matters dealing with free market economics – now sound a whole lot wiser.)

What will the Republican party look like ten years from now? The pendulum always swings back, and Republicans will find their voice and their appeal once again. I’m not sure exactly sure what the party will look like, whether the social or economic conservatives will prevail, and to what extent international relations will play a role. Maybe it will be something else entirely. But I have no doubt the GOP will move to make itself more attractive to the typical household, particularly since most of those in control of the party who remember things like Vietnam and the threat of socialism as if it were still happening today, those from “the golden age of conservative intellectualism,” are getting along in their years and will be replaced by younger leaders with new ideas. And when that happens, the political process will, once again, be as competitive as it can be in a market with only two dominant players. It’s nice having a monoply on political power, and I hope that Democrats continue to win, but it’s hard to deny that the process works better when there is effective (and sane) opposition.

About Mark Thoma 243 Articles

Affiliation: University of Oregon

Mark Thoma is a member of the Economics Department at the University of Oregon. He joined the UO faculty in 1987 and served as head of the Economics Department for five years. His research examines the effects that changes in monetary policy have on inflation, output, unemployment, interest rates and other macroeconomic variables with a focus on asymmetries in the response of these variables to policy changes, and on changes in the relationship between policy and the economy over time. He has also conducted research in other areas such as the relationship between the political party in power, and macroeconomic outcomes and using macroeconomic tools to predict transportation flows. He received his doctorate from Washington State University.

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