John McCain’s choice [Sarah Palin] was not a fluke, or a senior moment, or an act of desperation. It was the result of a long campaign by influential conservative intellectuals to find a young, populist leader to whom they might hitch their wagons in the future. And not just any intellectuals. It was the editors of National Review and The Weekly Standard — magazines that present themselves as heirs to the sophisticated conservatism of William F. Buckley and the bookish seriousness of the New York neoconservatives. After the campaign for Sarah Palin, those intellectual traditions may now be pronounced officially dead.
— Mark Lilla, “The Perils of Populist Chic,” The Wall Street Journal, Nov. 8, 2008
When the Reagans came to Washington in 1981 — no matter what your politics — it was an exciting time. They brought new ideas and challenged the worn-out tatters of New Deal liberalism. The “supply-siders” moved to center stage, supported by Milton Friedman’s monetary and public policy theories (which had been derided for decades by New Deal Keynesians).
But now, 30 years later, it is all gone. All this intellectual vitality — it drew its last breath with the nomination of Sarah Palin, described by Lilla as a woman “whose ignorance, provinciality and populist demagoguery represent everything older conservative thinkers once stood against.”
Reaganomics rested on three theoretical legs:
1) The “Laffer curve” opined that lower taxes on the wealthy would bring prosperity for all. They didn’t. 2) Reagan’s monetary policy suggested that if you lowered interest rates, you were always going to see the economy boom. It hasn’t.
3) As for deregulation, if some of it was good, more of it would be even better. Then came the savings and loan scandal, Enron, WorldCom, the collapse of the housing market and the bank meltdown.
Reagan conservatives had translated interesting and testable academic ideas into “Grand Theories” and then into dogmas. They abandoned pragmatism — sometimes called the “science of muddling through” — which the British have made work for centuries and Democratic administrations had made work for 50 years.
Republicans added one more ingredient to the bad brew: religious fundamentalism. Ever since it was embraced, it has confronted America, says Kevin Phillips, with “the peril and politics of radical religion, oil, and borrowed money in the 21st century.”
Enter Barack Obama. He faced a tsunami of a mess. At his amazing question-and-answer session at the Baltimore gathering of Republicans last week, he pointed out (citing CBO numbers) that more than 90 percent of the current national debt had accumulated either before he took office or before any of his policies, most notably the stimulus package, had taken effect. Add to that two wars, a collapsing banking system and near-Depression-level unemployment numbers.
Now, a year later, much remains to fix and the grumbling has begun. President Obama, some say, hasn’t been tough enough in fighting the forces that drove our economy into a ditch.
Is it that Obama hasn’t sufficiently demonized Wall Street?
That’s the populist complaint. But he knows that the one bright spot in the economy has been the stock market, which today means IRAs for the middle class. Demonize Wall Street and we risk a very jittery market taking another dive. Obama is smart enough to know not to fix one problem by creating another.
But he has spent too much time tilting at the windmills of bipartisanship. The stimulus fight should have told Obama all that he needed to know about his situation: The Republicans aren’t interested in bipartisanship. They meant it when they said they wanted to see him fail, and they aren’t about to give up their discredited dogmas.
Indeed, the President has struggled to find a saddle point between holding a Harvard seminar and taking a page from Richard Nixon’s political handbook: “Grab them by the balls, and their hearts and minds will follow.”
He can’t win by holding seminars. He would like to win without resorting to Nixon’s playbook. The Baltimore Q & A indicates that he is going to tackle this problem head-on.