Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Last week my friend, and Ricochet Member, Duane Oyen posited a question to those of us on the right, asking if it was time to "Re-Boot" conservatism. The centerpiece of Duane's post was an article by Dr. Steven Hayward, titled "Modernizing Conservatism." Dr. Hayward's piece, written at the request of The Breakthrough Institute, (an organization which Duane assures us is a "rational liberal" think tank) serves as a companion to a "modernizing liberalism" article. While Duane concedes that he agrees with a great deal of Dr. Hayward's ideas, he was curious about how others would react.
The reaction was swift as the comment thread itself became a bit contentious at times. But I thought it worth the effort to step back and read Dr. Hayward's article as dispassionately as possible, taking to heart Duane's admonition that, "… we also need to look at ourselves or we ourselves are unserious." Now to be sure, there are "pet conservatives" here and there whose primary occupation is tearing down those who advance the conservative cause. Because I don't count Duane in that category, I've spent no small amount of time considering the issues as Dr. Hayward frames them.
Dr. Hayward begins by citing the recent success of the Tea Party and the 2010 elections, and concludes that we're in trouble. "Conservatism," he says, "is failing on its own terms." As indicators, he points to a stagnant minority underclass and a middle class that is not only stagnant, but showing signs of economic regress. "Stagnant income growth and mobility and a shrinking middle class are considered unhealthy by most conservative understandings of social health, cohesion, and well-being," writes Dr. Hayward, but concludes that these issues, "…have attracted only the attention of Charles Murray." A categorical statement of this order, contradicted as it is by virtually every conservative publication and website in the country whose headlines and tables of contents regularly overflow with considered and urgent analysis of the catastrophic condition of the economy on both a macro and micro level, makes Dr. Hayward's conclusions something less than irresistible, …which is a polite way of saying, "Strike One." Yes, these issues are existentially important not only to conservatism, but to the survival of the country itself, which is why so many of us are utterly distraught by the choice in candidates offered to us in 2012. But Dr. Hayward doesn't really explain how the tragic indicators he cites can be called a failure of conservatism. Certainly the policies of the last two and a half years, which have brought the country to its knees, didn't originate from the right.
Then comes this statement, which is breathtaking:
By allowing their well-reasoned and often well-founded critiques of government action to metastasize into a categorical rejection of all prospective government action, while continuing to deny the basic political economy of the welfare state, conservatives increasingly find themselves in an ideological and practical straightjacket.
I, for one, categorically reject the idea that conservatives categorically reject "all prospective government action." What conservatives reject is unconstitutional government action. Conservatives have either proposed or passed, to standing ovations from other conservatives, one prospective government action after another, from "Cut, Cap, and Balance," to the Ryan Plan. The Constitutional distinction is a basic tenet of conservatism, yet curiously absent from Dr. Hayward's lengthy article. As to his assertion that conservatives, "…deny the basic political economy of the welfare state…" I know Dr. Hayward is aware of Paul Ryan's efforts in that very arena because he writes of them approvingly, so I'm at a loss to explain his assertion of a conservative denial. Strike Two.
One of the lynchpins of Dr. Hayward's argument that conservatism needs a restart, is something he describes as the failed "starve the beast" strategy. This strategy purports to reduce the size of government by reducing revenues into the government. Indeed, from a 1981 speech by President Reagan, we read;
Over the past decades we've talked of curtailing government spending so that we can then lower the tax burden. Sometimes we've even taken a run at doing that. But there were always those who told us that taxes couldn't be cut until spending was reduced. Well, you know, we can lecture our children about extravagance until we run out of voice and breath. Or we can cure their extravagance by simply reducing their allowance.
Conflating tax rates with tax revenues, Dr. Hayward continues;
Rigorous analyses from centrist economists Christina and David Romer of UC Berkeley, and from libertarian economist (and Reagan White House alumnus) William Niskanen conclude that the starve-the-beast strategy fails. Strikingly, Niskanen's analysis found that lower taxes correlated with higher levels of federal spending. As a result, Niskanen argues that raising taxes may be the most effective way to reduce government spending.
And that's really what he seems to be after here; higher taxes. The paradox of which he writes is really not so striking when you consider the fact that it was the tax rate that Reagan lowered, not tax revenue. In fact, revenues to the government increased from $517 billion in 1980 to over $1 trillion in 1990, according to the Heritage Foundation. Adjusted for inflation, that's an increase of 28%. The beast, therefore, was never starved. The government simply blasted through the additional revenue, over President Reagan's veto, and continued running a deficit. Strike Three.
"Thus, conservative attachment to a failing strategy has rendered the Right incapable of reducing government spending," continues Dr. Hayward, who prefers a "serve the check" approach framed in the manner of making Americans pay for all the government they receive. In other words, an increased tax burden. Dr. Hayward's statement that the current arrangement, "…allows Americans to receive a dollar in government services while only having to pay 60 cents for it," strikes a discord in the ear of a free man, presuming as it does that the taxpayer is somehow ripping off the government, when in reality it's the other way around. From Tea Parties to town halls, from letters to newspapers and across the internet to the wave of citizen legislators we sent to Washington in the last election, we keep telling the government to spend less, and yet somehow we are being allowed some sort of unfair bargain when they spend more? In the first place, we didn't order all this stuff off the menu, and we aren't terribly happy about paying the checks for almost 50% of the population. Hell, we didn't even get to read the menu in the case of Obamacare, which was passed against the popular will. Who, aside from leftists, demanded quantum increases in operating budgets for administrative agencies? Secondly, increasing the tax burden depresses economic growth which, in turn, can actually depress revenue and further exacerbate the problem of debt, unemployment, economic stagnation, etc. But in the final analysis, the beast will be starved because we are broke. Across Europe, governments are, "running out of other people's money," as Margaret Thatcher so famously and astutely observed. Raising the cost to the productive sector is not the answer.
Again, from Dr. Hayward:
It may be that internal ideological reformation must precede bipartisan political compromise. Ideological extremists in both parties have repeatedly succeeded in scuttling tax and entitlement compromises pursued by moderate reformers in their respective parties, and at the moment, the prospects for any compromises seem remote.
I'm always intrigued by this kind of language. The left in general, and President Obama in particular, have shown outright hostility toward the Constitution. Conservatives, on the other hand, have tried to restore and conserve it. What is this "extremists in both parties" business, exactly? I understand that working to undermine the law of the land is indeed extreme, but what is extreme about trying to preserve it? What part of the Constitution ought we to compromise, exactly? On a micro level, if we're going to compromise, how about doing so on the left side of the playing field for a change? Regarding taxing and spending, the compromise always assumes that both taxes and entitlements will increase and so we compromise on the rate of increase. This, we are told, is the smart and moderate thing to do. We pat ourselves on the back, and continue toward the cliff though at a slightly adjusted speed. Just once, how about telling the left that we will compromise on the rate of decrease? I suspect that would be labeled, by both the left and some on our own side, as intransigent. Conservatism doesn't need a re-boot, but rather a renewed fidelity to the enduring principles that made this nation great.
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Comments:
Jun '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Midget Faded Rattlesnake
...
Of course, in some sense the Laffer curve is beside the point. We don't want a government bent on maximizing its revenue.
MFR: Wow, nice graph. I had to go to the American Thinker website to fully understand it, though. The high point of the hill's contours is at 31% increase (131) in revenues at the points you mention.
I just want to focus on the single most important thing of about Laffer's famous dinner napkin: it shows that it is possible to decrease the tax rate and get an increase of the tax revenue.
Obviously, the people writing on this page understand this but I want lurkers and casual readers to realize how simple this curve is and how powerful a tool it is in a discussion with people who think this stuff is complicated.
0% tax rate => $0 revenue, 100% tax rate => $0 revenue (because everyone quits going to work) and there is a maximum point somewhere in between. If you are above that point in tax rates, then it is theoretically possible to lower the rates and not affect the tax revenue -- it should even go up.
Aug '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Canadians aren't more willing to take one for the team. The difference is that we have a different political structure. We're a pariliamentary democracy with strong party discipline. While this has plenty of bad points, it does allow government to do difficult things the citizenry doesn't like.
In the U.S. congress, every vote is individual. That means every politician is responsible to his constituents for every single vote cast. That would be a great system if the U.S. federal government stuck to its limited government constitutional mandate. But in a federal welfare/ crony capitalist state it's a disaster. Not only does it lead to bread and circus government, it also means that every politician is vulnerable to lobbying and corruption, becaue special interests can target individual politicians.
In Canada, the party can force all of its members to vote as a bloc. This means individual members don't have to tell their constituents why they voted to cut their welfare payments, and it also means lobbying money doesn't do a damned bit of good unless it's aimed at the very top.
Politicians can be courageous when hiding under cover...
Jun '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Mendel, MFR, Dan and Joseph: I agree that spending is the problem but we are fighting the Haywards and the Frums and the Republican cowards right now who want to raise taxes. This is how it always happens when we go after spending. These things are inextricably knotted together.
Mar '11
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
This is exactly my point -- spending and taxes are inextricably linked because conservatives made it so.
You can't have two top priorities. Conservatives are unable to stomach the notion of either raising taxes or not cutting government - but they won't be able to get both.
If we could simply agree that tax rates are a secondary priority - not capitulate on the issue, just move it lower down on the ladder - it would be much easier to find common ground with the Frums and Mike Murphys of the world.
Jun '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Dan: Interesting explanation.
I think this is what happens: First, the Commons is where all the power is placed and while there is a majority or even a shaky coalition the government that forms is in the hands of a very few people. There is effectively no upper chamber that can really stop legislation. (Please correct me if this wrong.) Also, there is no third center of power in the head of state because the governor general has no power at all.
So, yes, we have seen Canada in recent years with pretty good and responsible leaders overall -- and you get the results. But, imagine the electorate being able to hold off socialized medicine after the government got the bit in its teeth. America has been able to prevent this because we have more checks in our systems against a major thrust against the will of the people.
Unfortunately, our system is inferior in this one weird way that the Dems have exploited by buying votes: we seem to have allowed a ratcheting of things in favor of the Dems and bigger government and once these things get in place the checks in our system are used to stop reversals.
I would love to hear your comments on this.
Edited on November 22, 2011 at 1:15amAug '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Dan Hanson: The difference is that we have a different political structure. We're a pariliamentary democracy with strong party discipline. While this has plenty of bad points, it does allow government to do difficult things the citizenry doesn't like.
In the U.S. congress, every vote is individual. That means every politician is responsible to his constituents for every single vote cast. That would be a great system if the U.S. federal government stuck to its limited government constitutional mandate. But in a federal welfare/ crony capitalist state it's a disaster. Not only does it lead to bread and circus government, it also means that every politician is vulnerable to lobbying and corruption, becaue special interests can target individual politicians.
In Canada, the party can force all of its members to vote as a bloc... Politicians can be courageous when hiding under cover...
Excellent explanation, Dan. Thanks.
Leaves me a bit pessimistic about what can be done south of the border, though.
Jun '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Mendel
This is exactly my point -- spending and taxes are inextricably linked because conservatives made it so.
You can't have two top priorities. Conservatives are unable to stomach the notion of either raising taxes or not cutting government - but they won't be able to get both.
If we could simply agree that tax rates are a secondary priority - not capitulate on the issue, just move it lower down on the ladder - it would be much easier to find common ground with the Frums and Mike Murphys of the world.
You are right. Taxes are lower priority right now.
You can count on me to know how to and to want to prioritize things -- what will you do with the squishes, though? They are the ones who can always be depended on to provide a diversion, attack a fellow Republican, etc.
Oct '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Larry Koler
Joseph: what is a supply side tax cut?
One of the most common ways governments fight inequality is by faking high taxes. The marginal rate is set twenty, thirty, even fifty percentage points above what the government actually takes in (and needs). This is very convenient for politicians, as it masks all sorts of corruption and structural problems.
There's just one problem: high marginal tax rates discourage growth, no matter how much lower effective rates are. Thus, supply-side tax reform cuts out the difference between effective and marginal rates. Not only does this enhance growth, it also forces to government to deal with structural problems it might otherwise ignore.
Basically, supply-side tax simplification isn't just about crony capitalism or corruption. It strikes at the heart of the Democrat's corporatist ideology. Irresponsible big government policies (bubbles, budget deficits, the trade deficit created by budget deficits, etc) create lots and lots of inequality. By masking that inequality via tax manipulation, Democrats hope to sustain both big government and (especially) the public's toleration of the rent-seeking business they run.
Oct '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Not that I'm only blaming Democrats when it comes to irresponsible government behavior. George Bush spent plenty of time trying to copy them in the 2000s, after all. And the David Frums of the world wonder why Republican voters are so "unreasonable."
Jun '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Joseph: So, are you just saying that to do this, they just remove any deductions so that the effective rate closes the gap to the marginal rate? Or do you mean just to lower the marginal rate to close that gap?
You're so right that the marginal rates are killers -- it is this hill that a well off person has to climb once he's decided to do a little extra work, grow his company or feel bullish about the future. And it impedes him every step of the way for improving his life -- and ours.
Mar '11
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Dan Hanson:
In Canada, the party can force all of its members to vote as a bloc. This means individual members don't have to tell their constituents why they voted to cut their welfare payments, and it also means lobbying money doesn't do a damned bit of good unless it's aimed at the very top.
Politicians can be courageous when hiding under cover...
Makes me wonder if cutting beloved transfer programs would be easier in America if the Senate and/or president were still elected by the states instead of by popular vote.
Oct '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
The latter. Lower marginal rates to effective ones (which means cutting out most deductions, of course).
Oct '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Mendel
Dan Hanson:
In Canada, the party can force all of its members to vote as a bloc. This means individual members don't have to tell their constituents why they voted to cut their welfare payments, and it also means lobbying money doesn't do a damned bit of good unless it's aimed at the very top.
Politicians can be courageous when hiding under cover...
Makes me wonder if cutting beloved transfer programs would be easier in America if the Senate and/or president were still elected by the states instead of by popular vote. · Nov 21 at 5:12pm
I don't know about that. Senators do serve six-year terms. Take California: Feinstein is probably to right of whomever the state legislature would send (she's still quite liberal, of course, but California's legislature is much more lefty than that).
May '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Joseph Eagar
I think I've fallen in love with Canada. · Nov 21 at 11:25am
Well, we'd do that too if we had only 35 million people, much more homogeneous population, and actually chose to extract our oil assets from the ground.
May '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Larry Koler
Xennady:
...
When conservatives get uppity and challenge that assumption the leftist-dominated establishment hatefully mobilizes to destroy the challenger. Conservatives have learned this, painfully, and most accept it as normal, without conscious thought.
So when they venture into "mainstream" culture they adopt a pose accepting of many leftist tropes about conservatives, just to avoid the hate and anger, whether or not they make any sense. ...
Perfectly true. You should also like my take on this problem: we conservatives have been suffering under a type of Stockholm Syndrome wherein we have started identifying with our oppressors. We do this too much and so often that many of us don't realize when we have gone over the line to defeating a good conservative just because in doing so we seem more fair to our lefty friends.....
"Stockholm Syndrome"? It exists, sure. But this characterization is a bit overdone and simplistic. I refer you to William Voegeli.
Nov '11
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Midget Faded Rattlesnake
Mendel
The Democrats want to repeal the Bush tax cuts on the rich? Just give us Paul Ryan's Medicare and SS reforms first and it sounds like a good deal to me.
Hmm... I think I'm fine with that, too. But I know many Republican voters who'd go ballistic.
Political incentives are nuts, aren't they? · Nov 21 at 2:03pm
As much as I enjoyed watching the TEA Party, it always struck me as incongruous how often the message came across as "lower my taxes, government's too big...and hands off my Medicare."
Nov '11
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Mendel
...
You can't have two top priorities. Conservatives are unable to stomach the notion of either raising taxes or not cutting government - but they won't be able to get both.
If we could simply agree that tax rates are a secondary priority - not capitulate on the issue, just move it lower down on the ladder - it would be much easier to find common ground with the Frums and Mike Murphys of the world. · Nov 21 at 4:08pm
After considerable thought, the only scenario I see for making any real progress in turning things around requires as President a strong, wise leader that is respected (not necessarily liked, but respected) on both sides of the aisle. Such a leader could, maybe, wrangle both sides into giving up their hobby horses long enough to do some good.
Needless to say, I'm pretty pessimistic about things...
Aug '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Terry Mott
As much as I enjoyed watching the TEA Party, it always struck me as incongruous how often the message came across as "lower my taxes, government's too big...and hands off my Medicare."
Yeah, buddy. The times I joined TEA party protests and saw folks with similar signs, I really wanted to smack 'em upside the head with something.
But I didn't, because, you know, TEA partiers behave themselves.
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
I just got stopped for the night, having had a full day of fun and adventure (euphemistically speaking of course), so I haven't had time to sort through all of the comments here. Just skimming through them, however, there seems to be some real meat in this conversation. I look forward to reading this!
May '10
Re: Re-Booting Conservatism (or, In Which I Disagree With A Friend)
Midget Faded Rattlesnake
Mendel
The Democrats want to repeal the Bush tax cuts on the rich? Just give us Paul Ryan's Medicare and SS reforms first and it sounds like a good deal to me.
Hmm... I think I'm fine with that, too. But I know many Republican voters who'd go ballistic.
Hayward'/s advice exactly. Keeping your eye on the doughnut instead of the hole may mean paying for what we demand- but get the program structures right.
Once again- look at the chart at this article. Get back to the line slope of 2007, and then we'll talk revenues. Gladly- there is a structural pre-2007 deficit, and some compromise is probably needed. Admit it.
But fix the entitlements programs' structures first. This isn't a shave-the-amounts problem. It is about program structure that creates shortfalls- forever.