On economy, GOP candidates offer up slogans instead of solutions

December 05, 2007|By THOMAS F. SCHALLER

At a recent Republican presidential debate in Michigan, former Massachusetts Gov. Mitt Romney was asked what he thought was the biggest long-term threat to the U.S. economy.

"Our sense of optimism," he replied. "America has to be optimistic and recognize that there's nothing we can't overcome."

Forget the trade deficit, the collapsing real estate market or the lack of credit. Forget that during the Bush years the federal debt has increased by half, from $6 trillion to $9 trillion - about $30,000 for every man, woman and child in the country. Apparently, none of these deficits matters as much as the "optimism deficit."

Who knew financial woes could so easily be solved? All Americans need do is dial up the bank that holds their mortgage, outstanding student loan or credit card balance and ask if instead of full payments this month, they can send some positive vibes.

That Mr. Romney, despite such empty rhetoric, currently leads the Republican presidential field in New Hampshire, and, until very recently, Iowa, should surprise nobody. The great legacy of modern conservatism - its defining principle, in fact - is the triumph of platitudes over policies. It is a movement of slogans, not solutions.

This is most true in economic policy, as political writer Jonathan Chait explains in his compelling book The Big Con.

Mr. Chait chronicles the amusing tale of how a small cadre of "charlatans and cranks" concocted their bogus, supply-side economic theories, carefully packaged them in platitudes, and made them conservative orthodoxy. Despite the repeatedly inaccurate forecasts of economic poseurs such as George Gilder and Jude Wanniski, they still hold sway.

"When supply-side economics surfaced more than 30 years ago, established conservative economists ridiculed it," writes Mr. Chait. "At the time, `fiscal conservatism' meant prudence and opposition to deficits. Today, when media reports use `fiscal conservatism,' they're usually referring to supply-siders."

The rest of the Republican presidential field sounds a lot like Mr. Romney. Because tax cuts must be venerated at all times, no matter the budgetary or economic situation, the candidates have been reduced to repeating pat phrases and focusing on peripheral issues.

Arizona Sen. John McCain's obsession with earmarks is a perfect example. Mr. McCain repeatedly complains about pork-barrel projects, especially the so-called Bridge to Nowhere that would have cost U.S. taxpayers almost a quarter-billion dollars to connect Ketchikan, Alaska, to a small island inhabited by just 50 people.

But at most, earmarks account for about $40 billion of a $2.5 trillion federal budget. To depict earmark reform as the route to economic solvency would be equivalent to a family that's overburdened by a $2,500 combined monthly housing expense for the mortgage, utilities and insurance focusing on its Netflix bill.

Rudolph W. Giuliani is no better. The former New York mayor's campaign Web site provides assurances that Mr. Giuliani believes in supply-side economics and will "keep taxes low." Other than vague promises about fiscal discipline, there's no mention how he might balance the budget or reduce the national debt.

Of the major presidential candidates, only former Arkansas Gov. Mike Huckabee, who now leads Mr. Romney in Iowa, offers something new. But Mr. Huckabee's "Fair Tax" plan is a ridiculous sales tax on consumption - as well as yet another example of misleading GOP sloganeering. What he rarely mentions is that the tax rate on almost every item sold would need to be 23 percent to produce the revenues the government currently generates.

The consequences of blind devotion to suspect economic theories are stark, as the Nobel-winning economist Joseph E. Stiglitz points out in the current Vanity Fair. "Cumulative borrowing from abroad during the six years of the Bush administration amounts to some $5 trillion," he writes. "Most likely, these creditors will not call in their loans - if they ever did, there would be a global financial crisis. But there is something bizarre and troubling about the richest country in the world not being able to live even remotely within its means."

Silly Mr. Stiglitz, that pessimistic sissy. Doesn't he realize that American optimism will solve our economic woes?

Thomas F. Schaller teaches political science at UMBC. His column appears on alternate Wednesdays in The Sun. His e-mail is schaller67@gmail.com.

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