Brooks and Krugman

Bobo’s got a bad case of the flop sweats.  In “The G.O.P. at an Immigration Crossroads” he wrings his hands and moans that the Republican Party is about to secure either its future or its demise.  I think I know which it will be, given the current occupants of the clown car…  Prof. Krugman considers “Republicans’ Lust for Gold” and says the party’s presidential candidates are falling in behind — and falling for — hard-money policies.  Here’s Bobo:

It’s no exaggeration to say that the next six months will determine the viability of the Republican Party. The demographics of this country are changing. This will be the last presidential election cycle in which the G.O.P., in its current form, has even a shot at winning the White House. And so the large question Republicans must ask themselves is: Are we as a party willing to champion the new America that is inexorably rising around us, or are we the receding roar of an old America that is never coming back?

Within that large question the G.O.P. will have to face several other questions.

The first is: How is 21st-century America going to view outsiders? For Republicans in the Donald Trump camp, the metaphor is very clear: A wall. Outsiders are a threat and a wall will keep them out.

Republicans in the Jeb Bush camp have a very different metaphor. As Bush and his co-author Clint Bolick wrote in their book, “Immigration Wars,” “When immigration policy is working right it is like a hydroelectric dam: a sturdy wall whose valves allow torrents of water to pour through, creating massive amounts of dynamic energy.” Under this metaphor the outside world is not a threat; it’s a source of creativity, dynamism and perpetual renewal.

The second question Republicans have to ask is: Can the party see reality? The great Victorian critic John Ruskin once wrote: “The more I think of it I find this conclusion more impressed upon me — that the greatest thing a human soul ever does in this world is to see something, and tell what it saw in a plain way. Hundreds of people can talk for one who can think, but thousands can think for one who can see.”

Some Republican leaders simply lack the ability or willingness to acknowledge reality. Deporting 11 million people is not reality. Building a physical wall across the southern border is not reality. I’m sorry, Ted Cruz, but going back to the gold standard is not reality.

The third G.O.P. question is: How does the party view leadership? For a rising number of Republicans — congregating around Trump and Ben Carson — leadership is about ignorance and inexperience. Actually having prepared for the job is a disqualifying factor. Knowing the substance of government is a negative.

On the other side, people like John Kasich and Bush are becoming more aggressive in their defense of experience, knowledge and craftsmanship. They’ve become more aggressive in making the case that governance is hard and you’ve got to know how things fit together.

In the realm of immigration, the first conclusion any pragmatist draws is that it’s ridiculous to say we just need to start enforcing the laws. The problem, as Bush has argued, is that the laws are dysfunctional. The whole system is wildly broken and it would cause massive dislocation if the rules were actually enforced. The system needs to be reformed.

The other conclusion any pragmatist draws is that for political and practical reasons, the whole system has to be reformed comprehensively and at once. You can’t do anything effective unless all the pieces fit together. As Bush and Bolick argued in their book, “A goal of sealing the border is hopeless without creating an immigration pipeline that provides a viable alternative to illegal immigration.”

As anybody with legislative experience knows, nothing can be passed unless Republican interests are rallied along with Democratic interests, unless Silicon Valley’s political influence is joined by the farm state’s political influence. Doing that requires experience and knowledge.

Republican craftsmen understand this reality. Political naïfs do not.

The fourth question is: How does the Republican Party treat the distrust that is so pervasive in our society?

For some in the Cruz, Trump and Bobby Jindal camps, this distrust is to be exploited. This produces a kind of nihilism. Tear down. Oppose. Scorn. Shut down government but do not have an actual plan to achieve your goals once it’s shut down. Depose a House speaker but have no viable path forward once he is gone.

The other approach is to see distrust as a problem that can be reduced with effective conservative governance. Under Ronald Reagan, faith in government actually rose, because people saw things like tax reform getting done. Republicans in this camp view cynicism as a poison to be drained, not a kerosene to be lit.

On all these levels, the Republican Party faces a crossroads moment. Immigration is the key issue around which Republicans will determine the course of their party. It’ll be fascinating to see which way they go.

One more point. I’m sorry, Marco Rubio, when your party faces a choice this stark, with consequences this monumental, you’re probably not going to be able to get away with being a little on both sides.

Bobo, this is what happens when you leave the lunatics in charge of the asylum.  Now here’s Prof. Krugman:

It’s not too hard to understand why everyone seeking the Republican presidential nomination is proposing huge tax cuts for the rich. Just follow the money: Candidates in the G.O.P. primary draw the bulk of their financial support from a few dozen extremely wealthy families. Furthermore, decades of indoctrination have made an essentially religious faith in the virtues of high-end tax cuts — a faith impervious to evidence — a central part of Republican identity.

But what we saw in Tuesday’s presidential debate was something relatively new on the policy front: an increasingly unified Republican demand for hard-money policies, even in a depressed economy. Ted Cruz demands a return to the gold standard. Jeb Bush says he isn’t sure about that, but is open to the idea. Marco Rubio wants the Fed to focus solely on price stability, and stop worrying about unemployment. Donald Trump and Ben Carson see a pro-Obama conspiracy behind the Federal Reserve’s low-interest rate policy.

And let’s not forget that Paul Ryan, the new speaker of the House, has spent years berating the Fed for policies that, he insisted, would “debase” the dollar and lead to high inflation. Oh, and he has flirted with Carson/Trump-style conspiracy theories, too, suggesting that the Fed’s efforts since the financial crisis were not about trying to boost the economy but instead aimed at “bailing out fiscal policy,” that is, letting President Obama get away with deficit spending.

As I said, this hard-money orthodoxy is relatively new. Republicans used to base their monetary recommendations on the ideas of Milton Friedman, who opposed Keynesian policies to fight depressions, but only because he thought easy money could do the job better, and who called on Japan to adopt the same strategy of “quantitative easing” that today’s Republicans denounce.

George W. Bush’s economists praised the “aggressive monetary policy” that, they declared, had helped the economy recover from the 2001 recession. And Mr. Bush appointed Ben Bernanke, who used to consider himself a Republican, to lead the Fed.

But now it’s hard money all the way. Republicans have turned their back on Friedman, whether they know it or not, and draw their monetary doctrine from “Austrian” economists like Friedrich Hayek — whose ideas Friedman described as an “atrophied and rigid caricature” — when they aren’t turning directly to Ayn Rand.

This turn wasn’t driven by experience. The new Republican monetary orthodoxy has already failed the reality test with flying colors: that “debased” dollar has risen 30 percent against other major currencies since 2011, while inflation has stayed low. In fact, the failure of conservative monetary predictions has been so abject that news reports, always looking for “balance,” tend to whitewash the record by pretending that Republican Fed critics didn’t say what they said. But years of predictive failure haven’t stopped the orthodoxy from tightening its grip on the party. What’s going on?

My main answer would be that the Friedman compromise — trash-talking government activism in general, but asserting that monetary policy is different — has proved politically unsustainable. You can’t, in the long run, keep telling your base that government bureaucrats are invariably incompetent, evil or both, then say that the Fed, which is, when all is said and done, basically a government agency run by bureaucrats, should be left free to print money as it sees fit.

Politicians who lump it all together, who warn darkly that the Fed is inflating away your hard-earned wealth and enabling giveaways to Those People, are always going to have the advantage in intraparty struggles.

You might think that the overwhelming empirical evidence against the hard-money view would count for something. But you’d only think that if you were paying no attention to any other policy debate.

Leading political figures insist that climate change is a gigantic hoax perpetrated by a vast international scientific conspiracy. Do you really think that their party will be persuaded to change its economic views by inconvenient macroeconomic data?

The interesting question is what will happen to monetary policy if a Republican wins next year’s election. As best as I can tell, most economists believe that it’s all talk, that once in the White House someone like Mr. Rubio or even Mr. Cruz would return to Bush-style monetary pragmatism. Financial markets seem to believe the same. At any rate, there’s no sign in current asset prices that investors see a significant chance of the catastrophe that would follow a return to gold.

But I wouldn’t be so sure. True, a new president who looked at the evidence and listened to the experts wouldn’t go down that path. But evidence and expertise have a well-known liberal bias.

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One Response to “Brooks and Krugman”

  1. Frothy Says:

    Religious indoctrination is the same as pedagogical political rhetorical ideation. Easily massaged, enhanced, retrofitted and malleable like gold. Reminiscent of German wheelbarrows of currency pre-Hitler. Find someone to blame. Keep reminding people and take power. Insideous as it sounds there is hardly a difference in the Hezbollah MO than the Republican use of Christianity to wield power over society and declare dominion over women and minorities. As long as u identify with the winners killing is the pragmatic course.

    If Trump and Koch Industries are their symbol of success there is no way non-thinking Republicans or Democrats are going to consider science over religion to explain the universe or empirical facts over demagoguery.

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