Whither Reaganomics?

Author’s note: Today’s is the first post in the Blue Economist column on the subject of “Blue-State Economics: Viewing Our Most Important Policy Debate Through Progressive Eyes”

On one level, there’s little shock value to be derived from the near total absence of Republican mischief making in the current, lame-duck session of Congress: They did, after all, just get their watches wound in the national election. However, taking a slightly longer view, it’s not clear that this same measure of electoral defeat has stopped them before. Past democratic transitions have been marred by a bull-headed intransigence on the part of the defeated. This has been born of equal parts denial, ideological certitude, and base whipping. Just ask Bill Clinton.

If all is quiet on the right flank in Washington these days, it may just be that the Republican agenda makers, especially on the domestic side of the ledger, have awakened to the bankruptcy of their ideas. However, it is a far more likely scenario is that the right is lying in wait for the sort of substantive policy shifts that Barack Obama has already promised and was assailed for during the campaign. Once this assault has whipped their own base into a frenzy of disdain, Republicans can renew their time-tested formula of overwhelming the national agenda with catch phrases and vitriol. This will inevitably cast the Democrats in a weak light, despite their power.

It is worth considering how things got this way.

The modern discipline of economics is surprisingly neutral on questions of political discourse: Progressive income taxes may be defended on the principal of “diminishing marginal utility,” by which a dollar taken from a wealthy person and given to a poor person has a net-beneficial effect on all of society’s collective happiness, to pick one random but unusually topical example. Another example is where environmental regulations may be defended on the principal of “internalizing social costs,” wherein the non-monetary repercussions of a firm’s activities are converted into monetary ones through fines and regulations. In addition, minimum wage laws may be defended as having negligible effects on the employment of unskilled labor, since the unskilled labor in question is already being used in its smallest possible quantities by the firms employing them.

However, as adaptable as such progressive claims would seem to be to the underlying principles of modern economic thought, the academy is at the same time populated by individuals so ubiquitously and inflexibly conservative as to render them the frequent butt of both merriment and derision at the hands of their would-be colleagues in the other social sciences. “An economist engages someone else’s ideas about the way the world works,” wrote one columnist in a recent edition of The New Yorker, “the way a bulldozer engages a picket fence.”

This phenomenon is largely attributable to the coincidental (and misguided) desire on the part of professional economists to be regarded as objective, physical or “hard” scientists–more like chemists and biologists–and less like their messy-headed brethren down the hall in Psychology and Poly-Sci. If the practitioner has to be clean, then the practice has to be clean too. This in turn means that the rich (progressive) texture of policy debates must melt on contact with the paradigm to prevent it from looking unresolved. The anguish of jobs lost to technological change, the qualitative detriment of polluted air, the elusive tabulation of the spoils of a war on poverty–all of these are matters dismissed with a smug wink and the back of a hand.

As the paradigm has polarized itself to the right, so too has the rhetoric from conservative think tanks been tailored to a world where the cleanliness and simplicity of an answer is its highest virtue. This exists in a perfect synergy with the rank-and-file’s inability to regard any complex idea as anything but a threat. Surely the good people at Americans for Tax Reform don’t really intend for their government to be “drowned in the bathtub”–surely Grover Norquist has been to enough school to know that bridges in the host city of the Republican National Convention will, absent a government that’s just been drowned in someone’s bathtub, fall unceremoniously down. However, with a simple paradigm to claim as their own, the Norquists of the world have all the excuse they need to reduce a messy world to painfully simplistic causes that play perfectly with the low-information voters in swing districts.

It would be tempting to presume a January 20th expiration date on such laments, to believe that some sort of corner has been turned. But the bitter reality of the matter is that Mr. Obama’s performance was at its shakiest when he found himself confronted by a self-appointed Ohio foot soldier so perfect for the slick-sided provincialism of the modern conservative economics that he was drafted by the McCain campaign as its chief spokesman before the sun had set. It won’t get any easier from there.

The Democrats will not win an economics argument in this country on the basis of raw numbers alone; they never do. Now that the electoral battle has been won, the Democrats must take a big-picture approach to winning the larger war. Selling complex, messy ideas like progressive income taxes (to say nothing of the restoration of a modicum of governmental oversight) will require a fresh infusion of street-smart packaging to match such hate-button phrases as “death tax.” To do so will be to fight fire with fire. If the Obama administration dismisses such efforts as quotidian (or, worse, elitist), or if it presumes victory before the fact on the strength of its mandate, they could surely suffer the same fate as wide-eyed Democratic administrations in years past. The good news is that they’re already winning this P.R. battle with cool-headed, pragmatic appointments and centrist views. In other words, they’re winning it the same way they won the election.