Post Clint: Republican Economics

I resolutely refused to watch any of the Republican National Convention this past week, and won’t watch the Democrats this week.  As I’ve said before: I don’t watch infomercials.  I nearly missed the highlight of the convention, Clint Eastwood’s absurdist improv dialogue with an empty chair. Jon Stewart‘s response to Clint was both very funny and oddly insightful: “there’s a President Obama only Republicans can see.”  Hilarity aside, the Republicans are trying to combat the impression that they are primarily a party of angry wealthy clue-less old white men, so they feature, during their one hour of prime-time coverage, an octogenarian yelling at a chair?  I don’t get it.

I did read the main speeches on-line: Ryan’s, Rubio’s, Ann and Mitt Romney’s.  And they said all the right things, about the middle-class and job creation and rebuilding the economy.  My son and I set the plus/minus for use of the phrase “the failed policies of the Obama administration” at 60: if you’d bet the plus, you’d have cleaned up.  So these two questions suggest themselves: what policies exactly have failed, and what do you propose to do differently?

Let me quickly throw in my two cents: I think the Obama administration doesn’t really know exactly and specifically how to get the economy rolling again.  His economic team has some ideas, but they’re unfocused, contradictory.  When the President says, “I have a plan,” I don’t know that he really has one.  His economic team tends to lurch from idea to idea, from Keynesian stimulus to cost-cutting austerity, and back again. His singular achievement, Obamacare, was compromise legislation, and is flawed.  I support it, not because it’s perfect, but because it’s SO much better than the status quo.  Obama doesn’t have the gusto, the charismatic confidence of FDR, but his Presidency does remind me a bit of Roosevelt’s restless willingness to try anything.  FDR was advised by Keynes himself, and ought to have followed Keynes’ advice more closely, just as Obama would be better off if he’d listened more to Paul Krugman.  Obama’s been muddling through, but he did save the auto industry and he did save 3.5 million jobs with the stimulus package (according to the painfully non-partisan CBO).  It’s a mixed record, but over-all, some progress has been achieved.  And it was never realistic to think he could fix things in four years.  After all, Great Britain, France, Spain, Italy, Portugal, the Netherlands, Ireland et. al, faced the same difficulties, and, if anything, are doing worse than we are.

I think the Republicans, on the other hand, think they know exactly how to fix things, exactly how to get the economy rolling.  I think they’re brimming with confidence.  I think they think they’ve got a genuinely brilliant economic thinker in Paul Ryan, a serious policy wonk, and I think they’re completely on-board with his ideas.  I don’t sense any self-doubt at all.  I’m sure Ryan is a die-hard conservative ideologue, a man with a plan and a self-appointed mission. I hadn’t thought that described Romney . . .  but he did put Ryan on the ticket. 

And they’re completely, totally, 100% wrong about all of it.

Their proposals are on-line, and actually fairly specific.  Romney is on record as proposing to cut marginal tax rates to 28%.  Ryan’s plan cuts them to 25%.  Presumably, they’d split the difference somehow when it came time to actually pass legislation.  This is a massive tax cut, targeted towards the wealthy, and would add billions (the figure I’ve heard is 4.2 trillion) to the deficit over ten years. The cuts would be partially off-set by cuts in social spending, cutting such programs as food stamps, Pell grants, Aid to Dependent Children, school lunch programs, Meals on Wheels; essentially eroding the social safety net. 

This plays into a standard Democratic meme; Republicans as heartless plutocrats, callously enriching the rich on the backs of the starving poor.  Democrats like to see themselves as uniquely virtuous and caring–I don’t think that’s true.  I think Republicans genuinely do believe that tax cuts will stimulate economic growth, helping the middle class and providing opportunities for upward mobility.  I think Republicans genuinely do believe that welfare dependency is a real danger, that generational poverty is bad for everyone, not least bad for the poor themselves.  I really do think Romney and Ryan think these tax cuts and spending cuts will pay for themselves in time, and lead to greater prosperity for all.

They’re just wrong about all of it.

Conservatives famously dismiss Keynesian economics, and dismiss stimulus programs like the one Obama implemented.  But Keynes did believe that, under some circumstances, tax cuts could prove stimulative.  When inflation was high, and interest rates were high, tax cuts for rich people could free up much needed investment capital, stimulating economic growth.  This is what happened in 1980.  That’s why Reagan’s tax cuts had stimulative value.  Those were the conditions that existed then.  But that’s not what’s going on right now.  Right now, investment capital has never been more plentiful–interest rates could really hardly be lower.  Right now, we’re caught in a liquidity trap caused by a demand side recession.  What’s needed is more stimulus.  And Obama tried a stimulus, and it did work, some.  It was just too small to repair all the damage wrought by the financial crisis.

But we can know, for an absolute certainty, that the Romney/Ryan plans won’t work.  Spending cuts, these kinds of austerity measures have been tried.  Most of Europe suffers under the same conditions we’re facing; something akin to the Ryan plan has been tried.  To say it won’t work isn’t just theory.  We’re actually in a position to look around and see other countries–Great Britain, France, Ireland–with the same problems we have, with the same causes, and see what they’re trying and what’s working for them.  We can KNOW, with something approaching absolute certainty, what doesn’t work.

So in this election, we have a choice, between uncertainty shading towards truth, and certainty in the service of untruth.  I’m not certain Obama knows how to fix things.  I am certain that Romney thinks he can.  But he’s wrong, and Obama is closer to right. 

13 thoughts on “Post Clint: Republican Economics

  1. Anonymous

    Thank you for being the first person I’ve seen who says the problem with Obama is that he has not been liberal enough! Nobody I know has the guts to say it! That a Mormon is saying it is truly impressive. (No, I am not LDS; am learning from the outside about the range of individuality within that faith, since most of what I as a non-LDS member tend to see is the ultra-conservative. ) I also tend to blame the Republicans for making it impossible for Obama to accomplish much at all and then blaming him for failing. At any rate, thanks and I will stay tuned!

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  2. Anonymous

    You didn’t explain how printing more money for stimulus would help our economy. Making the dollar worthless isn’t going to help America. Adding more debt to the 16 trillion dollar debt isn’t going to help America–that defies logic. You like to blame Republicans, but let’s not forget where all this stimulus non-sense started: under the previous Republican administration. Your article is honest, at least, but if you think the solution is as wishy-washy as you project–that is truly scary.

    Giving people jobs, not giving them handouts, will restore the economy. In the last four years no jobs have been created–some have been preserved, perhaps, but jobs aren’t being created. It might just be the case that someone who hasn’t ever worked in a business, or actually had to create a job professionally, doesn’t know how to do it on the national scale.

    You also make it sound as though the Republican plan is to cutoff all of the safety-net programs, and that is completely bogus. Do they want to eliminate the excessive never-ending welfare programs–yes. When you have more people than ever before on welfare, you can help them get off welfare by creating jobs, and less of these overreaching programs will be necessary. You can’t make the argument that Republicans are bad because they are cutting off the hand that feeds them when Republicans plan to give people a new hand that will let them feed themselves.

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    1. Eric Sam

      Wait for today’s blog. There is an answer to these problems. I completely agree that the solution is to create more jobs. What no one has explained is how the Romney/Ryan plan will accomplish that. There’s simply not a jobs component to their plans, aside from the magic fairy dust of tax cuts.

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  3. Anonymous

    Eric, I enjoy your blogs, especially the non political ones =). I don’t agree with you on this. I think the republicans do have it right and they deserve a shot because I think another 4 years of Obama’s plans definitely won’t work. The fact that the dems look at us as heartless tells me that no, we are just…conservative. I want people to have welfare available to them if they NEED it…every republican that I know does as well. If they NEED food stamps yes. but I am so tired of seeing example after example of people defrauding the system.Welfare and Food stamps and WIC and other entitlements are meant to be a temporary help, not a way of life. I am willing to let the republicans fix this problem, “cause I don’t think the Dems ever can.

    Ward

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  4. Julia - Finding My Way Softly

    Anonymous 2-

    All those people who are being added to the rolls are people unemployed by the economic downturn and baby boomers who are retiring. Are you expecting baby boomers to work at entry level jobs, with no medical benefits from their jobs or medicare? Do you think cutting funding to food stamps (and it is a net cut under what it was in the Bush years) will help children learn in school or adults to get jobs, when they are not getting enough to eat? Is it better that more people (some of them families) end up without housing? How will that get the economy going?

    Honestly, I am not positive that some tax cuts may be helpful, but not if it means cutting the social safety net. If there was a way to cut taxes and not add those tax cuts to an already elephantine deficit, then the chance that it might work might be worth the rich.

    I agree with Eric. Something very close to the Ryan plan, but with a lower chance of permanently bankrupting their economies have been tried In Ireland and Great Britain, and in France they at least kept close to normal standards on their safety net. The biggest difference France offers is that the wealthy in France voluntarily paid additional taxes to support the poor and programs that were important.

    If the tax cuts were only to businesses themselves, and not to individuals, and the tax break was only offered for each job created. That is a sensible tax cut. It would give businesses a direct and long term benefit, and protect companies who create those jobs, while actively discouraging companies to cut huge numbers of employees that they don’t have to, since I think that the tax should be structured to have “creation” numbers be set at January 2013 levels, and when I company is purchased those employee levels go along with the company purchased.

    If Republicans and Ryan really were only interested in creating jobs for Americans, then no person would be given tax cuts, as a soft possibility (as in it didn’t work anywhere else, but the US is so (different, better, smarter, etc.) of potential job growth, and instead would encourage companies who have created jobs, and a vigorous program to seed companies in growth industries, with high job creation, as opposed to high profits. In many cases high profits are MADE by cutting jobs, having “lower employee costs” (benefits, wages) are completely counter to job creation.

    I definitely don’t think that Obama has all the answers, what REALLY frightens me is that Romney and Ryan seems to be such true believers, that they aren’t listening to anyone with thoughts or ideas different than there’s. In some ways they are that that way because the Republican base is not interested in hearing something they don’t always agree with, and so Republican candidates have pollsters tell them what the Republican base wants to hear. One of the things that gets reinforced within this particular echo chamber, is that anyone who doesn’t agree with the candidate, pollsters, base, FOX news, and/or Republican radio and TV personalities, must be wrong. There seems to be an over willingness to believe “trusted sources” and actually distrust those who have done reading or research that doesn’t agree with them.

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  5. Anonymous

    Hold on, Julia, can you honestly say that Democrats are open to ideas they don’t agree with? Come on now. All of the stuff you just mentioned about the base of Republicans can be said about Democrats. To pretend that Democrats are open to ideas outside of their platform is ridiculous.

    It’s difficult to have an honest debate about something, Julia, when one side says to other, “you won’t open your door to new ideas”, while simultaneously locking their door from the inside. There is nothing about current leadership in the White House or in Congress that indicates an openness to Republican ideas. So, it’s hard to make the argument that Republicans should be open to progressive ideas when the opposite isn’t even close to being true. Bill Clinton was open to Republican ideas, and that is why he was successful.

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  6. Julia - Finding My Way Softly

    Anonymous Again? –

    I have no idea who you are, but it was nice of you to use my name twice in such a condescending way. Well done. You wrote an entire comment that says NOTHING, and you think that it neatly sums up why “the other side” isn’t worth talking to. So, if you every show up, and ever have a name, I have a few questions for you…..

    Who do you think I am? What about my comment makes you think that I am on the “other side” from you? What assumptions have you made about me?

    And, why don’t you try having a debate, honest or otherwise, by addressing something in my comment that you actually disagree with and would like me to understand in a different way? (You might want to read all three of my comments on the next post too, I am sure that there are tons of nice “other side” things to choose from in them.)

    I will tell you two things about me. I am not a member of any political party, and am very glad that I live in a state that allows me to vote without any party affiliation, so that I can choose to vote for the person I think is best suited for the job, since I am not “one of X” that has to worry about voting against myself. I reguarly vote for Republican and Democrats, and lots of people who are not allowed to share their party affiliation, because they are running for a non-partison position.

    I am very aware of what goes on politically in my state. You might find that clicking on my blog, and checking out my post today, would give you a little more insight, but it still won;t put me in any convenient box that I will agree to stay in so that it makes it easier to insult and then marginalize me. I have friends on both sides of the aisle that respect me because they can come to me and ask me to critique a proposal from a variety of points of view.

    So, to answer the only question you asked in your comment:
    “Hold on, Julia, can you honestly say that Democrats are open to ideas they don’t agree with?” Yes.

    If you haven’t been keeping up on politics, that isn’t my fault.

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  7. Anonymous

    It’s silly to say that I have tried to marginalize you when you have done just that with your over generalization of Republicans. Which conservative principles are mainstream Democrats open to? I’m not talking about your buddy on the corner store; I’m talking about people who are leading the country. You may remember that the last administration was not fiscally conservative; in fact, they started all the stimulus spending. So yes, Republicans have been open to trying the progressive-style spending nonsense that got them kicked out of office.

    The Republicans that have been newly elected may not want to continue down that road that Democrats have driven down five times as fast since taking over, because Americans don’t want any more spending or debt. I will concede that you are right about the Republicans if you mean they don’t want to keep spending money that isn’t there and don’t want a massive takeover of government healthcare. But Democrats aren’t interested in seriously considering major cuts and seriously doing something to stop the madness. They aren’t serious about compromising with Republicans to change the policies–which have been Democratic policies–and work together.

    The problem with the eight years of Bush wasn’t that Conservative principles made everything worse, it was that Republicans turned away from those principles and started crossing the aisle and agreed to more social programs and spending. In other words, Republicans have been open to the ideas of the Left in the last decade, and it got us where we are. It’s time for us to stop putting money on the credit card and to start paying off the debt.

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    1. Eric Sam

      So you’re suggesting that George W. Bush was a . . . liberal? The reality is that Bush’s tax cuts were furiously opposed by liberals, and were a massive repudiation of Keynesian principles. They had no stimulative value whatsoever, and there was never any chance that they would have.
      What conservative principles are mainstream Democrats open to? Well, your nominee for President is Mitt Romney. He tried a market-friendly health care reform, which worked really well, and which we Democrats used as a model nationally. How is that not being open to conservative ideas?

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  8. Anonymous

    Mitt Romney’s healthcare plan was not a conservative idea, obviously–it was a progressive idea. There are few people that believe he has been steady when it comes to following conservative principles. But using that as an example, there is no comparison of the two healthcare ideas. Mitt Romney’s plan was designed to help 8% of the people uninsured in Massachusetts, and it was done on the state level.

    You don’t seem to be able to separate politicians from political philosophy and practice. I didn’t say Bush was a liberal generally; I said he implemented liberal policies. If someone believes in Mormon philosophy and is baptized a Mormon but doesn’t always practice what he or she believes, that doesn’t mean, necessarily, that they don’t believe in Mormonism or practice it in their heart of hearts. The same can be true with politicians–they may ultimately agree or side with certain political philosophies, but politicians are not the philosophies themselves.

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    1. Eric Sam

      See, this is where liberals and conservatives part company. To you Bush is, quite literally, an apostate. To me, as a liberal, I look at, say, Bill Clinton’s work requirements for welfare and think, huh, good, a conservative idea that works. Whodathunk it. Okay then. Glad we tried that. Conservatism strikes me as an ideology in ways liberalism really isn’t.

      There’s a lot more similarity between Romneycare and Obamacare than you’re suggesting, and the ‘state program’ vs. ‘national program’ thing couldn’t possibly matter less. But okay, I wouldn’t call Obamacare a progressive program (we wanted a single-payer system), I would call it a conservative program (uses market forces to reduce costs, keeps health insurance companies intact). But what do I know? So what would a conservative health care reform look like? How do you solve the problem of uninsured Americans?

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    2. Julia - Finding My Way Softly

      Thanks Eric,

      I kept going back and forth with myself, since random anonymous didn’t actually address anything in my actual comments. (I included this post with other “polite political opinion pieces” as part of the links in my Main Street Plaza Post this week.)

      I really appreciate that you do a great job explaining things carefully, without long rhetoric asides, and that you don’t get pulled into a discussion without definitions.

      Reply

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