Intertubes eating my comments

Krugman argues in this blog post that conservatism basiscally got their ideas through - slash the safety-net, slash taxes on high incomes, deregulation - and the result is slower growth and greater inequality.

I think a lot of the blame should go to Greenspan as well. He was loose on macroprudential policies "there's no bubble" and too tight overall. Inflation has been too low for a long time.

Greenspan, with help from Rubin, talked Clinton out of his Middle Class spending bill and fiscal stimulus, saying they would cause higher bond prices. He was talked into doing deficit reduction instead. Really Greenspan was threatening Clinton blackfmail: cut the deficit or I'll raise rates.

http://krugman.blogs.nytimes.com/2014/07/02/trick-or-tweak/

Sam Tanenhaus asks, “Can the G.O.P. Be a Party of Ideas?”

Why, no. This is another edition of simple answers to simple questions.

More specifically, the “reform conservatives” seem mainly to be offering supposedly new ideas for the sake of being seen to offer new ideas. And there isn’t much there there; can you find anything in the Tanenhaus piece that sounds like an important new idea rather than a minor tweak on the current conservative catechism? I can’t. I mean, converting federal poverty programs into bloc grants is supposed to be a major departure?

But then, the whole notion that new ideas are what politics is about is greatly overrated. Governing isn’t like selling smartphones; the underlying shape of the problems you have to confront changes quite slowly, and the basics of policy debate are quite stable.

In particular, the central policy debate in US politics hasn’t changed in decades, nor should it. Liberals want a strong social safety net, financed with relatively high taxes, especially on high incomes. Conservatives want much less of a safety net, and much lower taxes on the affluent.

Thirty-five years ago conservatives did produce a new argument — the claim that high taxes and generous benefits were producing such a drag on the economy that even lower-income Americans would be better off if we slashed all of that. And they got most of what they wanted — much lower taxes on top incomes, an end to welfare as we knew it, though not to the big middle-class programs. But growth failed to take off while inequality soared, so that the income of typical families grew much more slowly after the conservative revolution than before:

Photo

Credit EPI
So much for that big idea. Is there anything like that on the horizon? No — and it’s not clear why you should expect anything of the kind. What’s certain is that tweaking policy at the edges isn’t going to do much.

And I suspect that at some level the reform conservatives know this. The point of their proposed policy tweaks, I’d argue, is less to achieve results than to let the GOP dissociate itself from soaring inequality and stagnating incomes, without changing its fundamental policy stance. And it’s not a trick that’s likely to work.
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