David Frum, a Republican former speechwriter for President George W. Bush, rages (in a restrained rational-conservative way) against the dying of the rational-conservative light in the Republican party.
Too often, conservatives dupe themselves. They wrap themselves in closed information systems based upon pretend information. In this closed information system, banks can collapse without injuring the rest of the economy, tax cuts always pay for themselves and Congressional earmarks cause the federal budget deficit. Even the market collapse has not shaken some conservatives out of their closed information system. It enfolded them more closely within it. This is how to understand the Glenn Beck phenomenon. Every day, Beck offers alternative knowledge — an alternative history of the United States and the world, an alternative system of economics, an alternative reality. As corporate profits soar, the closed information system insists that the free-enterprise system is under assault. As prices slump, we are warned of imminent hyperinflation. As black Americans are crushed under Depression-level unemployment, the administration’s policies are condemned by some conservatives as an outburst of Kenyan racial revenge against the white overlord.
Meanwhile, Republican officeholders who want to explain why they acted to prevent the collapse of the U.S. banking system can get no hearing from voters seized with certainty that a bank collapse would have done no harm to ordinary people. Support for TARP has become a career-ender for Republican incumbents, and we shall see what it does to Mitt Romney, the one national Republican figure who still defends TARP.
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[I]t’s not always true that what’s good for Goldman Sachs is good for the economy, or vice versa. Nor is what “the markets” want the same as what free-market economics require. Finance plays with other people’s money: financial disasters damage people and businesses who never participated in the fatal transaction. For that reason, financial firms are justly regulated in ways that other firms are not. And yet nearly 80 years after the creation of the Securities and Exchange Commission, influential conservatives — including The Wall Street Journal editorial board — argued that trillions of dollars of derivatives trading should be exempt from regulation.
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If Republicans reject Obama-style fiscal stimulus, what do they advocate instead? A monetarist might recommend more money creation, even at the risk of inflation: “quantitative easing,” as it’s called. Yet leading voices in the Republican Party have convinced themselves that the country is on the verge of hyperinflation — a Weimar moment, says Glenn Beck. But if fiscal stimulus leads to socialism, and quantitative easing leads to Nazism, what on earth are we supposed to do? Cut the budget? But we won’t do that either! On Sean Hannity’s radio show, the Republican House leader John Boehner announced just before the election that one of his first priorities would be the repeal of the Obama Medicare cuts.
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Social Security, unemployment insurance and other benefits were designed as anti-Depression defenses, “automatic stabilizers” as economists called them. When people lost their jobs, their incomes did not drop by 100 percent, but by 30 percent or 40 percent: they could continue to pay rent, buy food and sustain society’s overall level of demand for goods and services. State pensions created a segment of society whose primary incomes remained stable regardless of economic conditions. The growth of the higher-education sector and of health care had a similar effect.
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Those who denounce unemployment insurance as an invitation to idleness in an economy where there are at least five job seekers for every available job are not just hardening their hearts against distress. They are rejecting the teachings of Milton Friedman, who emphasized the value of automatic stabilizers fully as much as John Maynard Keynes ever did. Conservatives should want a smaller welfare state than liberals in order to uphold maximum feasible individual liberty and responsibility. But the conservative ideal is not the abolition of the modern welfare state, and we should be careful of speaking in ways that communicate a more radical social ideal than that which we actually uphold and intend.
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Non-Tea Party Americans may marvel that any group can think of itself as egalitarian when its main political goals are to cut off government assistance to the poorest and reduce taxes for the richest. But American populism has almost always concentrated its anger against the educated rather than the wealthy. So much so that you might describe contemporary American politics as a class struggle between those with more education than money against those with more money than education: Jon Stewart’s America versus Bill O’Reilly’s, Barack Obama versus Sarah Palin.
This brand of populism is not necessarily a majority phenomenon– after all, far more Americans have a favorable opinion of Barack Obama than of Sarah Palin. But clearly it dominates the Republican party base.
The U.S. political system is not a parliamentary system. Power is usually divided. The system is sustained by habits of cooperation, accepted limits on the use of power, implicit restraints on the use of rhetoric. In recent years, however, those restraints have faded and the system has delivered one failure after another, from the intelligence failures detailed in the 9/11 report to the stimulus that failed to adequately reduce unemployment, through frustrating wars and a financial crash. The message we hear from some Republicans — “this is no time for compromise” — threatens to extend the failures of governance for at least two more years. These failures serve nobody’s interest, and the national interest least of all.
Well, nice try, David.
