Divisive Economics

Guest Post Courtesy of David Brin

Let’s step away from politics…. till the end of this missive… and look instead at economics:

Fiscal Management

The Evonomics site -- where Adam Smith would post, today -- offers this: Economists Agree: Democratic Presidents are Better at Making Us Rich. Eight Reasons Why.

 

The difference is stunning and inarguable... an average of 4.4% annual growth vs. a piddling 2.5%... and it has been consistent across 70 years. How to explain it?

The eight hypotheses offered here are interesting and consistent with modern economics. (Which "Supply Side voodoo" is not.) But #7 will resonate with what I have been saying to so-called market conservatives for years:

7. Fiscal Prudence. True conservatives pay their bills. From the 35 years of declining debt after World War II (until 1982), to the years of budget surpluses and declining debt under Bill Clinton, to the radical shrinking of the budget deficit under Obama, Democratic policies demonstrate which party merits the name “fiscal conservatives.”

Now, in fairness, a cogent Republican would answer: "Hey, weren't there Republican Congresses during some of that time?" Yes, and that actually mattered once - during the anno mirabilis year 1995, when Newt Gingrich corralled enough GOP support and negotiated with Bill Clinton to give us both Welfare Reform and the Budget Act. We almost got a third miracle, when the bipartisan Danforth-Kerrey commission proposed a compromise Entitlements Reform package that would have secured our finances for decades while ensuring every American child got health care. 

We know what happened then. Led by Dennis "friend to boys" Hastert, the Murdochian Republicans rendered the Danforth kind extinct, ending all semblance of adult politics in America. (And Newt knuckled under, instead of fighting for America.)

Proof that Clinton, not the GOP, merits credit for the Clinton surplusses is simple. Those surpluses turned red almost overnight in 2001. What changed politically? A shift in the White House, not Congress, Cause-and-effect. Subsequent Republican Congresses were the laziest in U.S. history, passing almost no bills and holding few non-Clinton-aimed hearings, except for eagerly passing Supply Side tax cuts for the uber-rich. But that's another matter.

Alas, this list is incomplete. The best hypothesis for why the economy does better under democrats is left off is my addition:

#9: Under democratic presidents, regulators act to enforce the rule of law. That’s the chief function of the Executive Branch. And when there is a democratic president, his appointees actually try to make the duly legislated laws of the United States function in the best manner intended. 

Yes, there are anecdotal examples of that being a bad thing! But negative in general? Dig it. Across 6000 years, all flat-fair-competitive markets were destroyed by cheaters (mostly feudal lords), until the recent invention of regulatory law... As recommended in Wealth of Nations. As we see in professional sports, you only get competition that is flat and fair when there’s regulation. 

Yes, it is conservative dogma that all regulation’s bad! (On occasion, regulation can be cloying, as with the industry-captured ICC and CAB -- the examples relentlessly cited by Ayn Rand -- which were eliminated by... Democrats.)  But is faithful execution of duly-enacted U.S. regulatory law negative in general? The actual evidence – both from 6000 years and the last 70 or so – suggests that the dogma is just plain wrong.

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Gary Anderson 2 months ago Contributor's comment

This is a brilliant article. Ouch. It is more than just a brilliant article. It is an indictment of American politics and the lover of boys, Dennis Hastert. The concept of the confederate president is chilling, but likely real in some ways.