Voodoo Economics, the Next Generation

By Paul Krugman in The New York Times

Fred R. Conrad/The New York Times

Fred R. Conrad/The New York Times

Even if Republicans take the Senate this year, gaining control of both houses of Congress, they won’t gain much in conventional terms: They’re already able to block legislation, and they still won’t be able to pass anything over the president’s veto. One thing they will be able to do, however, is impose their will on the Congressional Budget Office, heretofore a nonpartisan referee on policy proposals.

As a result, we may soon find ourselves in deep voodoo.

During his failed bid for the 1980 Republican presidential nomination George H. W. Bush famously described Ronald Reagan’s “supply side” doctrine — the claim that cutting taxes on high incomes would lead to spectacular economic growth, so that tax cuts would pay for themselves — as “voodoo economic policy.” Bush was right. Even the rapid recovery from the 1981-82 recession was driven by interest-rate cuts, not tax cuts. Still, for a time the voodoo faithful claimed vindication.

The 1990s, however, were bad news for voodoo. Conservatives confidently predicted economic disaster after Bill Clinton’s 1993 tax hike. What happened instead was a boom that surpassed the Reagan expansion in every dimension: G.D.P., jobs, wages and family incomes.

And while there was never any admission by the usual suspects that their god had failed, it’s noteworthy that the Bush II administration — never shy about selling its policies on false pretenses — didn’t try to justify its tax cuts with extravagant claims about their economic payoff. George W. Bush’s economists didn’t believe in supply-side hype, and more important, his political handlers believed that such hype would play badly with the public. And we should also note that the Bush-era Congressional Budget Office behaved well, sticking to its nonpartisan mandate.

But now it looks as if voodoo is making a comeback. At the state level, Republican governors — and Gov. Sam Brownback of Kansas, in particular — have been going all in on tax cuts despite troubled budgets, with confident assertions that growth will solve all problems. It’s not happening, and in Kansas a rebellion by moderates may deliver the state to Democrats. But the true believers show no sign of wavering.

Read more at The New York Times

Categories: Economic policy, Economics, History, Opinion/Editorial, Political commentary, Political economy, Politics, Sociology, U.S. history, US News

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4 replies

  1. I never tire of reading Paul Krugman. But I have grown tired of America politics since the last election, because Republicans had apparently learned nothing. That pig is never going to sing opera, no matter how much I want it to.

    So, I almost don’t care what happens in the midterm elections next month. Almost. Because I understand what is at stake. As professor Krugman points out, this has been one of the fastest economic recoveries from a major recession in United States history–and this has happened in spite of every Republican attempt to stifle an economic recovery. Spending is not the problem. It never has been. It’s the lack of spending, stupid.

    Liked by 2 people

  2. Konigludwig; I have heard more than one person make that statement . This breaks my heart because we need a massive turnout this midterm to change the gerrymander system. I voted early this year. I hope and pray others Vote but the base of the Democratic party is broken which was what the GOP worked for..

    Liked by 1 person

    • Hello, my friend. Good to hear from you. I didn’t mean to suggest that I don’t care at all. But if people are stupid enough to reelect Brownback or McConnell what can you do?

      No, I’ve been a Democratic partisan for a long time. I care very deeply about the direction of this country and the conditions of life for average working Americans. I’ve contributed more money to the Democratic campaigns in this election cycle than in any before. We’ll be voting early for the first time in my household. The economy is showing a solid recovery in progress. I like our chances in November.

      Republicans ran campaigns based on opposition to President Obama. There’s not much left for them to oppose. In this election and in 2016 they will have to run on their own merits. They don’t have much to run on.

      Liked by 1 person

      • I know you care. I am a deep blue liberal now. A flaming liberal in the deep south. I am trying to feel good about the midterm. I am surprised how many DEM’s and REP’s that are tired of the grid-lock. Personally, I am tired of the fox viewers and how misinformed they are. I still encourage them to vote but most are too upset. Maybe you are correct, we will have a chance if we just get out and Rock the Vote:-)

        I heard tonight that Missouri sent out their early voting ballads but they changed to laws. All the early voters will not be counted. The state refuses to spend the money to correct the misunderstanding. The state citizens are voting already and they will not be counted. I do not know how they could do this. That makes me worried because I just voted via early voting ballad in the deep south. The cheating on the right has me worried. Now I will have to call the Supervisor of Elections to verify that my early voting will be counted. Did anyone else hear that report about Missouri?

        Liked by 1 person

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