Thursday, September 23, 2010

Are the Republicans Taking the Pledge Hypocrites?

I admit that I couldn’t manage to keep my eyes open through a continuous reading of the Republican’s A Pledge to America (pdf). That’s not a criticism of the document. It’s a standard campaign platform, designed to take up rhetorical space with a bunch of unobjectionable ethical generalities and policy proposals couched in language calculated to project the appearance of specificity without tying the party’s hands down the road. That’s how political parties going into elections try to show voters that they’re serious about governing. Discussing that document’s merits as political philosophy and/or public policy makes about as much sense as discussing the literary merits of a Hallmark greeting card. In both cases, it’s the (utterly unspecific) thought that counts.

The Republican Pledge predictably provoked charges of hypocrisy from liberal pundits anxious to contrast their own intellectual heft with vaporous Republican opportunism. Paul Krugman was in characteristically fine form characterizing the Republican message: “Deficits are Evil! Let’s Make Them Bigger!” Ezra Klein says substantially the same thing less epigrammatically:
“What, exactly, does the Republican Party believe? The document speaks constantly and eloquently of the dangers of debt -- but offers a raft of proposals that would sharply increase it. . . .

“Take the deficit. Perhaps the two most consequential policies in the proposal are the full extension of the Bush tax cuts and the full repeal of the health-care law. The first would increase the deficit by more than $4 trillion over the next 10 years, and many trillions of dollars more after that. The second would increase the deficit by more than $100 billion over the next 10 years, and many trillions of dollars more after that. Nothing in the document comes close to paying for these two proposals, and the authors know it: The document never says that the policy proposals it offers will ultimately reduce the deficit.”
Let’s take a step back from the partisan fray far enough to characterize what’s going on in this sort of exchange. We’re used to hearing an epigram commonly attributed to Daniel Moynihan: “Everybody’s entitled to his own opinion, but not his own facts.” That makes it sound like political ideologies are unstable mixtures of ethical commitments and factual beliefs, as readily separable as the oil and vinegar in salad dressing. The implication is that, even if people on both sides of an ideological divide can reasonably disagree about questions of political morality, they can still hold each other’s feet to the fire by exposing factual mistakes. That’s the conceit behind Krugman and Klein’s allegations of hypocrisy.

Yet, as I’ve noted before, that’s not how ideologies work. Our perception of the how the political economy actually behaves interacts, epistemologically and psychologically, with our views about how it should behave. So it’s no accident that conservatives and liberals not only have systematically different takes on political morality, but embrace systematically different explanations of our current economic predicament that imply conflicting prescriptions about how to reduce the deficit over the long haul.

Liberal wonks like Krugman and Klein think that, because we’ve gotten ourselves into a “liquidity trap” at a time when low interest rates preclude  monetary remedies, the only way out is putting more publicly borrowed money in the hands of the people most likely to spend it. That liberal prescription just happens to coincide with the liberal view of distributive justice and the political interests of the Democratic Party.

The conservative wonks behind the Republican Pledge think that we’re suffering from a capital strike provoked by hyper-active governments. The only way they can see out of that predicament is a combination of tax policies that keep money in the hands of the people most likely to invest it and policies scaling back regulations that lower the expected rate of return on the dollars they invest. That prescription just happens to coincide with the conservative idea of economic justice and the political interests of the Republican Party.

Both sides can’t be right and neither side is immune to wishfully thinking that prudent management of the economy, their core ideological values and political expedience all happen to point in the same direction. But hypocrisy has virtually nothing to do with it.  When people on one side of an ideological divide call people on the other side hypocrites, they're usually presuming, falsely, that the people on the other side agree with them about how the world works.  

That's yet another rhetorical place holder that says a lot less than the people saying it seem to think.


Osama Von McIntyre said...

Well, you could use another word, but there's some culpability here. They have made the debt central to their critique of the Obama Administration, and of the Democrats generally, but haven't given the issue enough genuine thought or analysis to propose anything but policies that would make the situation worse.

I'm inclined to grant a little latitude towards political promises that are really more about ideological signalling, but the Pledge to America doesn't even try to bridge the gap between promise and policy. If the policies in the pledge, however inchoate, are pursued, public debt will become much worse.

That the Democrats seem unable to make that point is unfortunate, and entirely their own fault. But there a number of ideological fundamentalisms out there that are sleazy, intellectually lazy, and harmful to the public discourse (my favorite that lowering taxes always raises revenue, but I'm a liberal...)

The Republican chatter about the deficit represents, to me, one of the most wry ironies of our current political discourse. For the past forty years, each Republican administration has increased the deficit, and each Democratic administration has reduced it (I'll grade Obama on a curve here, because of the financial crisis).

So, it's not exactly hypocritical, but it is kinda sleazy...

Ron Replogle said...


I agree that the Pledge is bad public policy. But why is the conservative (supply-side) idea that it's a bad idea to let the upper-bracket tax cuts expire despite the deficit any "sleazier" than the liberal(Keynesian) idea that more public spending is a good idea despite the deficit? There are reputable macro-economists on both sides arguing that policies with short-term deficit-increasing effects will help reduce the deficit over the long term. If you ask me the symmetry is pretty impressive

Osama Von McIntyre said...

That's simple (but you won't like my reply.

One is correct, and the other is not.

Supply-side ideas are not without merit, but have only actually worked in instances where the marginal tax rate was near-confiscatory (e.g. the 90%+ rates involved in JFK's 1962 tax cuts, or the 70% rates in Reagan's inital round of cuts), but never, ever, ever at anywhere near the rates that exist today. No economist without a personal partisan agenda has posited this. What has happened, is that politicians have captured supply-side rationales to justify policies as though they are universal truths. It is sleazy because it is dishonest, and it is dishonest not so much because conservatives are lying, but because they don't really care enough to understand well the economic theory underlying their political argumentation. Conservatives use supply-side arguments to argue in favor of policies that they support anyway.

On the other hand, liberals are making the Keynesian case for stimulus right now, because there are ample indications of a shortage of global demand, and this presents a case where stimulus has worked well historically.

Liberals generally don't argue for deficit spending when the economy is not in recession. Their argument for Keynesian stimulus is specific, targeted, and limited. On the other hand, conservatives almost always argue for lower maximum marginal tax rates (as they do now, notwithstanding the fact that they are currently at an 70-year low).

So, since you asked, one is sleazy because it is a dishonest argument, and the other isn't because it's not.

In response to your last sentence: congressional conservatives are not proposing short-term extension of the tax cuts for the short-term, but permanently. Liberals have proposed stimulus only until the economy has recovered.

I find the two cases fundamentally dissimilar. You don't?

Ron Replogle said...

As long as we apply your macro-economic theory, the cases are dissimilar--just as they'd be if we apply a conservative macro-economic theory that says, over the long haul, an economy with permanently low marginal tax rates has the best shot of growing it's way out of a structural deficit. That's something lots of economists believe who'd never dream of saying that every decrease in marginal tax rates necessarily generates an increase in tax revenues.

Given the state of micro-economics, nobody really "knows" whether demand-side or supply-side theories more closely approximate the truth. So the fact that liberals and conservatives are proposing inconsistent ways of attacking the deficit doesn't show that either side is being unreasonable.

But if conservative prescriptions aren't demonstrably irrational, how can you be so sure that they're dishonest? You say: "Conservatives use supply-side arguments to argue in favor of policies that they support anyway." True enough. But don't we liberals use demand-side, Keynesian arguments to argue for a redistribution of wealth from richer to poorer people (on the theory that poorer people have a higher marginal propensity to consume) that we support as a general matter of distributive justice anyway?

The symmetry still looks perfect to me.

Osama Von McIntyre said...

I don't see the symmetry that you do.

I'm sure that liberals don't much mind that Keynesian stimulus disproportionately advantages the poor, but that's more like a lucky side-effect than the core policy. But, once again, stimulus is a policy prescription that is targeted, specific, and limited. It may not be the correct response to the current crisis, but one could make a rational and coherent case that it is, based both on economic theory, and its success in past crises.

That's not really the case with the tax cuts.

A structural deficit is one in which the imbalance between income and expenditure is tied to long term outlook. In such cases, the prescription is simple (to describe, not effect): increase income faster than expenditure, or decrease expenditure faster than income (or some combination).

What the Republicans have chosen to propose is to lower income, and increase expenditure. Since Social Security is directly tied to the growth rate, Medicare expenses are inflating considerably faster than rates of inflation or economic growth, and the horribly-nonspecific "rollback" to 2008 spending levels of discretionary spending promises no more than a 0.5%-of-GDP spending reduction--at a time when the long-term part of the deficit is at about 7% of GDP.

Moreover, much what they're proposing is politically infeasible, which is part of why it is so vague. Total discretionary, non-military spending is about $450 billion. The structural deficit is about... $700 billion. A 10% cut of all discretionary spending would get rid of 6 percent of the long-term deficit (and I don't believe that even a 10% cut is politically feasible).

I'm not saying that belief that we can fix economy purely by cutting spending is not sincerely held. But it's not actually true, and conservative opinion leaders are actively driving their movement (and the country) into the ditch for short-to-medium term electoral gain.

It is to the eternal shame of the Democrats that they cannot make this case, or draw a clearer picture of what society would actually look like if the advocated policies were pursued, or make an effective counter-argument that the economy does better under Democratic stewardship.

So, Ron, I think there's a very large difference between promoting a potentially bad, but defensible policy versus promoting a guaranteed bad policy.

I am not willing to use the word "hypocrisy" from your original post, because I do believe that the tax-cutters beliefs are honestly held. But they are intellectually lazy and dishonest in the sense that anyone with Google and a pocket calculator can determine in ten minutes that you can't get to a zero deficit with tax cuts and non-radical slashing of spending.

Conservative opinion leaders know this (I know this, because they do not drool). So the alternatives that I'm left with is that they are either mis-representing their actual policy prescriptions (which would be hypocrisy!) or they simply don't care about the deficit, and hope, nevertheless, to ride the issue back into Congress.