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September 17, 2007
In ‘The Big Con,’
Jonathan Chait Exposes the Lie of Supply-Side Economics
How did an economic philosophy with little basis in fact, with little
credibility from either professional or academic economists, and with
little support from the general public, become an article of faith in a
major political party, and eventually the law of the land? One of
Washington’s smartest journalists looks at that question in an engaging
and entertaining new book.
In “The Big Con: The True Story of How Washington got Hoodwinked and
Hijacked by Crackpot Economics,” longtime New Republic writer
Jonathan Chait traces the history of the supply-side economics movement,
from a goofball theory by a couple of conservative movement gadflies in
the 1970s to its eventual implementation.
How did it happen? Republicans, in the Bush era, eventually realized
that having the support of the corporate class was what mattered, and
regardless of what else they did in power, they would continue to have
that support so long as they got a tax cut every year.
It all fits the Republicans’ current ethos, which is essentially to say
to blue-collar conservatives, “Hey, we know you’re not rich, but
someday, maybe, you will be. So, we’re going to cut taxes on the richest
of the rich, and maybe someday, you’ll get to partake in that. In the
meantime, feel free to have nothing but resentment for rich people – but
only if they’re lawyers, movie stars or liberal politicians.”
Supply-side economics – also known as “Reaganomics,” “trickle-down
economics,” “voodoo economics” and numerous other derisive terms – is
not to be confused with such other, generally conservative positions
such as laissez-faire economics, or “fiscal conservatism.” It’s the idea
that no matter the economic circumstance, the ideal solution is always
another tax cut.
Chait makes all sorts of fascinating points about this state of affairs.
Perhaps the best part of all is a chapter about the conservative
veneration of Ronald Reagan, and the assumption among people of the
right today that any conservative who questions the idea of tax cuts is
“betraying Reagan’s legacy.”
As Chait points out, not even Reagan lived up to the “Reagan legacy.”
Yes, the Gipper passed a huge tax cut soon after taking office in 1981 –
but subsequently raised taxes numerous other times throughout his
presidency. If a Republican today were to run on Reagan’s actual record
and, upon his election, enact Reagan’s policies, most conservatives
would likely call him a closet liberal, if not an outright traitor, and
defeat him decisively.
Republicans today may treat Reagan as a deity, but that doesn’t mean
they actually remember what he actually did in office. Sean Hannity,
numerous times, has said something along the lines of “if Reagan were
alive today, he would never allow Iran to acquire nuclear weapons.”
Reagan’s actual administration, of course, sold arms to Iran, a gambit
overseen by Hannity crony Oliver North.
The first half of the book traces the history of the supply-side
movement, its spread, and its eventual implementation, first under
Ronald Reagan, and later – even more egregiously – under the current
President Bush. The second half pulls back from economics and makes
general observations about the last decade of American politics.
There’s certainly nothing wrong with the book’s second half – after all,
Chait is right about most of what he says – but the first half is so
strong and so original that one wishes Chait had stuck with the economic
arguments for the entire book. This is likely a case of the author,
writing his first book, trying to get many of the observations gleaned
from a decade of Washington work into it, regardless of its
correspondence with the book’s overall thesis.
common theme in the book’s second half is a distrust of bipartisanship
and centrism, since the conservative movement is dedicated towards total
domination of politics, while there is no corresponding “liberal
movement,” because both “liberal” institutions (the media, think tanks,
etc.) feel the need to embrace bipartisanship.
It’s a surprising theory coming from Chait because he has, if anything,
often been a hated man in the left-leaning blogosphere, branded a
sellout and a crypto-conservative, mostly because of his initial support
for the Iraq war, some not-so-nice things he’s written about the
netroots and his association with The New Republic, which the
blogging left considers part of the right. This, even though Chait
authored a piece in 2003 that began with the phrase “I hate President
George W. Bush.”
Because it provides a fascinating look at macroeconomics, an issue
criminally ignored in most media debates about politics, Chait’s book is
North Star Writers Group. May not be republished without permission.
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