Tsk tsk tsk

One of the attractive features of the Republican Party is the supposed commitment to fiscal discipline and economic efficiency.  The ideology behind this view is a belief in the strength of the market and the invisible hand.  Not only does the logic of capitalism encourage individuals to work hard, invest, and save, but it ensures that individuals who have other preferences besides capitalist accumulation will still have these needs fulfilled.  Now, we can argue till the cows come home about whether the assumptions that underlie this model are correct or realistic, but that’s the basis of the argument.  For the rigorous mathematical proofs that explain just exactly what the world has to be like for this model to be realistic, see Arrow and Debreu (1954).

I (TP) am skeptical about how realistic this model is, but the logic remains the same even if markets are imperfect.  (By the way, my skepticism is not liberal graduate student bluster, but something that most Nobel Laureates in economics would agree with.)  Governments should not interfere in the markets unless there’s a good reason.  I view that as not only a very liberal argument–in the real sense, not the Rush Limbaugh sense of liberal-as-a-swear-word–but a very American argument.  Do not let governments interfere in the working of the market or the lives of private citizens.

Academic conservatives often argue that they support Republicans because their policies are closer to these ideals than Democrats.  I am also skeptical of that.  What’s my evidence?  None other than the rampant explosion of pork barrel spending that we have seen under the Bush administration.  The fiscal stance of the Republican Party since Bush took the presidency in 2001 has been an embarrassment to economic conservatives at the Heritage Foundation and the Cato Institute.

We see more of this today in an announcement that I’m sure has not been news anywhere except for that stretch of conservative goodness from Tallahassee, Florida to Brownsville, Texas.  Yes, Bubba Gump’s shrimp territory.  The Bush administration has rammed through a series of tariffs and non-tariff barriers like import quotas on shrimp imports from China and Southeast Asia.  This is just another example of Republican administrators revealing their true preferences to the American people.  Republicans are not free traders, they are protectionists just like other politicians.  Sure, Bush tells you he believes in markets, but I am waiting for some economic conservative to please explain to me how this behavior conforms to such a belief.

Any college student worth a "C" in Introduction to Economics can tell you why protectionism is a bad idea.  It comes down to comparative advantage, plain and simple.  It would be more productive for would-be shrimp farmers to find something else to do than for them to continue in their unproductive occupations as shrimp farmers.  If there were a special demand for Gulf Coast Shrimp, then people would be willing to pay for it, but the market apparently believes that Cambodian and Red Chinese shrimp taste just as good.  The insidiousnes of this policy is the fact that its effects ripple across the world.  First off, you the American consumer have to pay higher prices for shrimp because you can’t get your foreign shrimp at market prices.  Second off, because labor in the United States will not be allocated efficiently, prices in general in the United States are higher than they should be.  Third off, and what really stands out when you live abroad, Bush’s economic policies are directly impoverishing Southeast Asians by taking away jobs from them.  Apparently, this adminsitration would rather keep hundreds of thousands of Southeast Asians poor so that you can save six cents on your dinner.  I know of no conservative economic viewpoint wherein this is a good idea.

Now Bush has claimed he’s going to cut the budget deficit.  How many times does he get to promise this before Americans say, "I’ll believe it when I see it"? Remember all of this fuss about reforming intelligence gathering and homeland security that Bush and friends have been fighting about lately?  If intelligence gathering is so messed up, can someone explain to me why creating a giant new federal bureaucracy was necessary?  Can we get rid of this now, please?  How about our non-functional missile defense shield to defend against….who?  Terrorists?  They carry suitcase bombs, they don’t launch ICBMs.  Please cut this from the budget.  How about massive farming subsidies to the Midwest?  Can we please cut provisions from the budget that pay corn farmers to throw away their product?

What this really comes down to is the following argument.  Economic conservatives vote for Republicans because they believe that Republicans will implement free market policies.  I have argued and offered evidence that Republicans do no such thing, they are opportunistic politicians like everyone else.  What’s the alternative?  Vote for Democrats, who do the same thing?  Yes.  And you get the nice benefit of Democratic policies on social issues, which are preferable as well.  But what if you are an economic conservative and a social conservative?  So, you believe that the government should not interfere in the market, but should prevent two loving adults from having the state recognize their relationship.  You believe that free markets are correct, but only for people in the United States.  Well, you don’t have a party that represents all of your preferences, but you should vote for Republicans because at least they give you social conservatism.

Comments 7

  1. Josh December 21, 2004

    Major flaws in the argument here:
    1) That spending is the only indicator of economic conservatism
    2) That a similar argument over lack of ideological purity can’t be made with regards to Democrats and social liberty
    3) That a defense that doesn’t stop every attack is not worth pursuing
    As for protectionism, which is to me by far the most odious aspect of the Bush administration’s economic policies to date, it’s worth noting, I think, that you have links on the right-hand side of the page to a presidential candidate who built his economic platform on demagoguing ‘outsourcing.’

  2. Tom December 21, 2004

    1. Spending is not the only indicator of economic conservatism. So is protectionism. We could also go about discussing pro-cyclical tax cuts, but we’ve addressed that elsewhere.
    2. You are right about Democrats, but that’s not a flaw in my argument, that’s something that makes me mad about Democrats. Perhaps you’d like to cite an example?
    3. Any investment in defense should be weighed against the cost to calculate it’s expected utility. The utility is the probability of success times its benefit. The probability of success here is, so far, zero. Maybe someday it will be some small positive fraction. Its benefit is small because even the proponents don’t imagine it will stop all of them. Its costs are astronomical. I though that economic conservatives were all about making rational spending decisions. Note that this evaluation still makes the unrealistic assumption that people who want to nuke us will still use ICBMs if we somehow made the technology work!
    When you rail on Kerry being a protectionist, you prove my point. Kerry and Bush are both protectionists. Saying that you vote for Bush because he’s an economic conservative is like saying I vote for Kerry because he’s pro-life. It’s just not true, even if you want it to be.
    There is no party that represents my preferences. There is a party that represents some of them, and a party that represents none of them.
    So, no flaws in my argument.

  3. Josh December 21, 2004

    About to go to sleep, but:
    “2. You are right about Democrats, but that’s not a flaw in my argument, that’s something that makes me mad about Democrats. Perhaps you’d like to cite an example?”
    Your argument is that if you’re economically conservative and socially liberal, you should vote Democrat, because at least you’ll get the socially liberal part, since Republicans aren’t actually economically conservative, right?
    Therefore, if the same argument about Democrats not actually being socially liberal can be made, then it falls apart, right?
    As an example, take gay marriage– you might think you’re getting a socially liberal position on gay marriage with Democrats, but the last Democratic president signed the Defense of Marriage Act, and the last Democratic presidential candidate averred that he and George W. Bush had the “same position on gay marriage.” You could counter that Democratic rhetoric and instincts on the issue are closer to yours than Republicans, but I could easily claim the same thing about Republicans on economic issues.
    In SAT form,
    John Kerry on gay marriage:Democrats and social liberalism::Bush on protectionism:Republicans and economic conservatism

  4. Tom December 21, 2004

    True. But the Defense of Marriage Act does not make gay marriage illegal. There is no question that Kerry would not sign an amendment to the Constitution against gay marriage. I am quite confident of that. Plus, Clinton managed the economy well, knocking down trade barriers as far as the Republican Congress would let him, and balancing the budget. I got what I wanted there in terms of economic conservatism.
    Bush would love the chance to save our country from homosexuals who threaten straight marriages. He would sign that amendment in a heart beat.
    I don’t make any bones about rhetoric being responsible for policy. I stake my argument’s claim on revealed preferences through policy decisions, or in this case, lack thereof. Fact: the Democratic Party is not pro-life, is not anti-loving relationships, etc.
    If your response were correct, we’d still be in a situation where the Republican Party–or at least this adminstration–presents itself as free market but is not, and presents itself as socially conservative, and is.
    What is your view on the fiscal policies of the Bush administration? You already disagree protectionism, and monetary policy is controlled by the Fed, so Bush has no control over that. Besides making war and trying to legislate morality, that’s about all that governments do. To put it this way, what if a Democrat had the same fiscal policies as Bush?

  5. sandy December 21, 2004

    Tom, since a shrimp is a lethal weapon to you, I commend you on your liberal shrimp views.

  6. Sandy December 21, 2004

    Josh, I simply cannot understand how a fiscal conservative like you can support the Bush administration’s economic policy. The Medicare Drug bill is going to put us TRILLIONS of dollars further in debt. The administration refuses to take its “political capital” and make some hard decisions about Social Security’s future other than steps to dismantle it. Remember it is your generation and your kids who are going to have to pay for this. I can’t understand why you and other fiscal conservatives aren’t raising hell at this administration’s run up of the national debt!

  7. Tom December 22, 2004

    There is a nice Keynesian defense of deficit spending during hard times. The idea is that you stimulate demand through fiscal policy decisions–FDR, etc. Of course, doing this is far more efficient if you are creating jobs rather than increasing the income stream of the rich.
    However, I suspect that economic conservatives want nothing to do with government-sponsored counter-cyclical fiscal policy, so out with the pseudo-Keynesian defense.
    And Josh, to respond more completely to your criticism: if a Democrat voted to make abortion illegal, or to amend our founding document to restrict how loving couples can express their love, s/he would almost certainly lose my vote.

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