Tuesday, October 11, 2011

Would McCain Have Been a Better Keynesian than Obama?

Talk about demoralization among liberal Democrats. Jonathan Chait’s a guy who’s not exactly shy when it comes to upholding the intellectual and moral authority of liberalism in general and Keynesian fiscal policy in particular. Yet now he’s suggesting that our economy might have been in better shape, by his own lights, had John McCain won the last presidential election:
“[A] McCain presidency would, for purely political reasons, offer the possibility of greater Keynesian demand-side response. . . . Perhaps a President McCain might have designed a less sweeping and less effective stimulus than President Obama did. But Republicans would have gone along — after all, they did under Bush, and this time the justification was far stronger. It’s also likely that Democrats would have gone along, because they have shown themselves to be happy to support stimulus under Republican presidents. It also seems likely that, as the crisis deepened, President McCain would have fought for more stimulus measures, and these measures would not have been dead on arrival because there would not have been a right-wing backlash against the first one.  . . .

“This argument also suggests that the best way to get more stimulus into the economy would be … to elect Mitt Romney.”
If you ask me, Chait’s intellectual and moral contempt for Republicans gets the better of him when he insinuates that, despite everything they've said about fiscal policy over the last thirty years, thoughtful Republicans are really closet Keynesians.  On that basis he figures that they must have opposed the 2009 Recovery Act and oppose Obama’s present jobs bill less out of ideological conviction than political opportunism. But the idea that we might have gotten more demand-side stimulus out of a McCain administration still makes some sense even when you grant that Republicans have been acting in good faith.

From what I can tell, McCain has always been too interested in other things to bother developing deep convictions about economic policy. But, as a matter of temperament, he’s pretty obviously incapable of passivity in the face of any crisis, including an economic one. Remember how, although he plainly didn’t have any clue about what ought to be done, he melodramatically suspended his presidential campaign in the fall of 2008 to show us what a decisive a leader he is?

It’s not implausible to me that faced with an intractable economic crisis, President McCain wouldn't have had the patience to wait for Republican supply-side remedies to kick in. That wouldn't have pleased conservative Repubicans, but McCain may well have gotten enough support from congressional Republicans acting out of partisan solidarity and congressional Democrats acting out of economic conviction, to get more stimulus enacted than Obama has. (Think of how Richard Nixon stiffed conservatives by resorting to wage and price controls and declaring that "we're all Keynesians know" in the early 1970s.)  Moreover, if any of this is right, you have to contend with the possibility that something similar might happen if Romney defeats Obama in 2012.

I gather that Chait thinks he's making a point about the lamentable lack of civic and intellectual virtue in Republican circles.  So he doesn’t stop to ask himself what it would say about the state of liberalism as a governing philosophy that the best way to achieve its objectives in a matter of overriding social importance may be to entrust the government to people who don’t believe in it.  Whatever you may think about the citizenship of Republicans, it can't say anything good.

1 comment:

Anonymous said...

I think the comparison between Nixon and McCain is a good one. McCain would have been all over the place dealing with this economy,