Thursday, June 9, 2011

Conservatives criticize Republicans' "growth"-based economic policy.

Kevin Williamson writes in the National Review:

If we had the ability to know in advance how much growth particular economic policies would produce — or even whether they would produce growth at all — then we would never have a recession. We would always be at the sweet spot of maximum real growth. But we are limited and fallible creatures, and right-wing political macroeconomic management is no more reliable, or predictable in its outcomes, than is Keynesian political macroeconomic management. The economy is not a machine, and any time a politician says, “If we will adopt Policy X, we are sure to achieve Statistical Abstraction Y,” he is talking through his hat. . . .

We probably credit politicians too much for good economic outcomes and blame them too much for bad economic outcomes. The economy is big and complex; public finances are less so, and we could, right now, enact policies that would address the imbalances in those public finances, and do so in an orderly and largely predictable way. But that means making very unpleasant choices of the sort that are bound to be keenly unpopular with voters in New Hampshire, Iowa, Florida, etc. . . .

It is important to work toward growth, of course, and to adopt good economic and monetary policies that we think will encourage it. . . . But counting on optimistic assumptions about growth beyond current projections is, for the most part, a way to evade the very difficult business of reconciling our public income with our public spending. We have to work with what we have, with the reality before us.
Ross Douthat, the New York Times' house conservative, links to Williamson's piece and adds that Republican presidential candidate Tim Pawlenty has been engaging in
magical thinking, in which cutting taxes on business, investment and high-earners leads to 5 percent growth every year for a decade — something that neither the Reagan nor the Clinton booms came close to achieving — which in turn goes a long way toward closing the budget deficit, happily, before we have to start in on painful cuts.
Ramesh Ponnuru (who writes for the National Review) has more thoughts on how Republicans "don't appear to be trying very hard" to come up with a realistic economic agenda. "[H]alf-remembered bits of Reaganism aren’t a sufficient conservative agenda for today."

When conservatives are so consistently attacking Republican policy — not for being too squishy or compromising with Democrats, but for being too rigidly, ideologically extreme — those conservatives are worth taking seriously.