Thursday, April 21, 2016

James Pethokoukis beat me... the punch with an excellent piece, "Donald Trump has killed Reaganomics. And that's okay."

Or at least he beat me to that title. The rest of it isn't exactly what I would have written.

A week or so ago, I heard Charlie Rose ask Jeanne Cummings, Mike Barnicle, Mark Halperin and John Heilemann if the Democratic Party of Bill Clinton was dead (at about 23:00).

In other words, have events, and Bernie Sanders, pulled the Democratic Party -- and Hillary -- to the left in such a way as to make everyone forget the centrist years of President Clinton? And the answer, I think, is yes.

But I think that's the wrong question. To me a better one would be, Is the counter-revolution ushered in by Ronald Reagan dead? And my answer would also be yes.

In my grand history of the United States, I would list the four major events as:

1) the Revolution,
2) the Civil War,
3) the Second American Revolution, aka, the New Deal, and
4) the Reagan (counter) Revolution.

Now, it could be argued that I left out a few minor things: the Progressive Era, the two World Wars, the Great Depression, etc. But just humor me for a minute.

If the New Deal radically restructured American life (and I would argue it did), then the presidency of Dwight Eisenhower was just a brief interruption in the years 1933-68. I guess you could say that both Eisenhower's and the Nixon/Ford administrations were just interruptions in the years 1933-1981. The reason being that neither of those two-term presidencies tried to repeal the New Deal. (Nixon may have actually strengthened it.)

Then along came the Gipper in 1981 and his (counter) Revolution. And, just like Ike and Nixon, Clinton's two terms in the nineties may have been just an interruption in those years. Remember "the era of big government is over"?

But maybe W.'s disastrous administration was the final nail in the Reagan coffin just as Carter's was the dénouement of the New Deal.

If all of that is true -- are you still following me? -- then maybe the question Mr. Rose should have asked is, Is Reaganism dead? And I would say, again, yes.

But, first, Mr. Pethokoukis argues that Donald Trump's:

...candidacy has undermined the intellectual credibility of modern Republican economics.

How so? By taking "supply-side" economics to its logical (and absurd) extreme:

[Trump] says he wants to deeply cut taxes by some $10-12 trillion over a decade, while also balancing the budget without cutting projected entitlement spending. To meet all those goals, Trumponomics would have to generate growth of more than 10 percent annually over a decade, according to the Committee for a Responsible Federal Budget. And as their analysis notes, real GDP growth would have to be twice as high as the fastest growth period in the last 60 years. Only emerging economies playing catch-up grow that fast. More likely, Trump would dramatically increase the national debt by 50 percent or more, which is bad for growth. In other words, Trump's tax plan is every bit as ridiculous as his plan to build a megawall, conduct mass deportations, and launch many trade wars to "bring the jobs back." 

He concludes by saying (my emphasis):

Maybe the best case scenario here is that this tax-driven embrace of Trumpism finally ends the dominance of old-school supply-siderism on GOP economic thinking. Imagine a future Republican presidential primary where it isn't always 1980, where candidates don't feel compelled to play ersatz Reagan and offer fantasy tax plans as the price of admission. Imagine candidates competing to have the most detailed, evidence-backed plan to improve higher education or reduce poverty. Maybe then "supply-side" reform to boost the labor supply and innovation can mean something broader that mega-tax cuts: regulatory reform, education, and public investment in basic research and infrastructure. And America can again have an effective center-right party.

It's a good piece; I agree with pretty much everything in it. Mr. Pethokoukis appears to be one of the few conservatives with an open mind and a willingness to live in reality. (David Frum is another that comes immediately to mind.)

But I would have used that same title to say something just a little bit different. While the GOP establishment, best exemplified by Paul Ryan, is still living in the 1970s, Trump (and Ted Cruz to a much lesser extent) is driving the Republican Party away from Reaganism.

Forgetting the Donald's crazy tax plan for a second (and Mr. Pethokoukis concedes Trump doesn't talk about it much), if you focus on some of the other issues Trump does talk about, it's quite a departure from St. Reagan. Trump differs from the GOP establishment on trade, immigration, foreign policy and entitlements, all of which -- most importantly -- are resonating with the base.

And that's what I mean about the death of Reaganism. Never mind the Democratic Party of Bill Clinton; the Republican Party we have come to know over the last 36 years may be dead. Even if Trump is denied the nomination, the base has spoken. And what it has said -- loud and clear -- is that it wants to preserve welfare (for old white people, at least), put an end to trade deals that send blue collar jobs overseas, put the kibosh on immigration reform and stop sending young people to wars of choice that result in them coming home with lost limbs or PTSD.

The question now is, Is the establishment listening? I would say no, but whether they know it or not, the Reagan era is dead.

No comments: