The New Republic features a fascinating article on the the takeover of the U.S. right by supply-siders. I'd often wondered how these nuts became "mainstream" (in political circles at least). Now I know.
American politics has been hijacked by a tiny coterie of right-wing economic extremists, some of them ideological zealots, others merely greedy, a few of them possibly insane. [...] The result has been a slow- motion disaster. Income inequality has approached levels normally associated with Third World oligarchies, not healthy Western democracies.
[...]
It was not always this way. A generation ago, Republican economics was relentlessly sober. [...] Over the last three decades, however, such Republicans have passed almost completely from the scene, at least in Washington, to be replaced by, essentially, a cult.
8 comments:
Interesting article, Ami, and shockingly not hidden behind any of TNR's aggravating multi-leveled access restrictions. Your first link didn't work, but the link at the bottom of the article worked.
Thanks Indy. Fixed the link.
One question I have with this article is how the modern day supply-siders compare philosophically with McKinley-era Republicans. Those Republicans vehemently opposed any forms of direct taxation, believing I suppose that the government could be funded via protectionist import tariffs and other fees plus revenues raised via mineral rights and timber leases plus outright sale of federal lands. I've always felt there was a distinct similarity between the two groups' positions, but really haven't delved deeply into the earlier group's philosophy.
I don't know enough about U.S. history to comment on McKinley. It sounds like these guys were a some combination of mercantilist and what we would now call economic libertarian.
I'm a little skeptical of trying to fit supply-siders into any philosophical framework. They agree with libertarians about taxes, but then none of us really likes taxes.
What sets the supply-siders apart is that they imagine they've found a magic formula to reduce taxes without any of the downsides, and they refuse to change their views in the face of contradictory evidence. I guess that's why the article refers to supply side economics as a cult.
I have a hard time calling the McKinley-era businessmen economic libertarians since they were such strong proponents of high tariffs to keep out foreign competition. It's also hard to justify the growth of trusts and their use as a tool for creating monopolies in industries which aren't naturally monopolistic as being economic libertarianism.
But I see your point and will acknowledge it as a significant difference between the supply-siders and the McKinley Republicans. Both groups share some common interests, such as manipulating government so that the rich can get richer, but at least the earlier group also was steadfast in saying no to growth in government responsibilities (and the resulting spending) as well.
Ami, QandO has an article tonight about the Laffer Curve and where we are on it that you should find interesting.
Interesting article, but not quite accurate. It's unlikely that the U.S. was on the right side of the curve even in 1980.
Also some strange misconceptions in the comments. One of the commentators seemed to think that the Soviet economy never grew, for example. Not that communism was a great idea, but they were quite successful for the first 30 years or so. In fact they developed very rapidly.
I wonder how widespread these myths are.
Myths have become the norm, unfortunately, and not just among Laffer's disciples. It almost doesn't matter what you believe - you'll be able to find someone on the internet "proving" your point.
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