as economist Brad DeLong recently showed in a Vox interview. DeLong, who calls himself a “Rubin Democrat” (a reference to Clinton’s centrist treasury secretary, Bob Rubin), argues that the moment is such that “The baton rightly passes to our colleagues on our left. We are still here, but it is not our time to lead.” “DeLong believes,” according to the piece, that “the time of people like him running the Democratic Party has passed.”
In fact, there seems to be a widespread sentiment on the (formerly) center-left of saying about the hard left “If you can’t beat ’em, join ’em.”
To me, it seems that it is not just that the political discussion is moving toward the hard left. I see something similar going on among economists. Some prominent recent examples:
1. Emmanuel Saez and Gabriel Zucman.
3. Jason Furman and Lawrence H. Summers.
What I call hard-left economics argues that high marginal tax rates on the rich have little or no adverse consequences. It argues that large government deficits have little or no adverse consequences. As a result, the bumper-sticker version of these papers would be:
Government should tax the rich more, because it can.
Government should spend more, because it can.
I can remember how economists on the left excoriated George W. Bush for squandering the budget surplus that President Clinton had started to build. That surplus was supposed to help avoid a collision of Baby Boomer retirement with fiscal capacity. DeLong once snarked that President Bush thought it was fine to run big deficits “because there are still checks in the checkbook.”
“There are still checks in the checkbook” has become the new fiscal wisdom.
If ever there was a time for moderates (of which I doubt DeLong is really one) in the Democratic Party to take charge, this is it. DeLong’s sentiment is bizarre. “I know I’m right but I’m conceding the debate anyway.” Or perhaps he things the far left can beat the Republucans more easily, though I’m not sure why he’d believe that.
I honestly doubt whether there are any principled center-left people anymore. Their main critique of socialism seems to be that it’s not practical right now; that it’s going too far too fast, but to agree in principle. They’ve conceded moral superiority to the extremists and are only willing to dispute the immediate practicality of their ideas.
They are pushing the default scenario.
The idea is that we are lost anyway, the youngsters can never cover the interest charges on the national debt and boomers are if full running away mode. So, push as much left wing debt as possible to be in a better position at the default table.
For millennials, the cost of federal debt service comes close to 4% of their income. And we haven’t even started on what the owe on state pensions. And, they nver voted for any of this, is the problem. The millennials are forced to roll over debt from the Reagan bailout of Texas, 45 years ago! They were not even born. 4% is like an ATM fee, they cannot even use money until they agree to pay.
When SS payments stop getting made all that is going to happen is I will need to give my parents the exact same amount so they can pay their rent.
This discussion reminds one of the attitude expressed by many academicians during the 1960s, those who declined to defend their institutions then under attack by radical students. “Oh, it’s time to let the kids take over” was the oft-heard meme of the day, akin to today’s “If you can’t beat ‘em, join ‘em.” Such statements, spoken with an air of scientific determinism, are fraught with nihilism and cowardice by people who ultimately are incapable of belief, of thought, of will, of life, and of death.
Alec Reeves, one of the inventors that gave us our digital age, wrote in 1968 a short piece called Young Fools vs Old Fools.
It is now on line here:
http://www.quantium.plus.com/ahr/fools.htm
Yes, and it allows the Boomers to default in 1972. Got us off the gold standard. We will partially default again, likely this cycle or the next.
In 2020, this description of hard-left economics will be opposed by what, exactly?
Government should tax the rich less, because it can.
Government should spend (even) more (than it has), because it can.
It will be 2024 at least, and probably later, before we get an opportunity to have any chance to vote for an adult economics policy, from either side. Teams of economists are available to defend any policy. The pushback against deficits has not been inspiring.
There will be no pushback against deficits until Japan, with debt over 200% of annual GDP, is having real trouble because of their deficits. Or the US catches up with Japan in debt.
There will be no real entitlement reform with reduced benefits until the Dems push for them, which will probably not happen until there is real depression style trouble.
Conclusion –
-Reps should support a Job Guarantee program for “national service” of every citizen to get a job, paying 80% (or more) of the lowest enlisted pay for the military.
-Reps should strongly push reduced taxes for the working classes: reduced, not higher, SS taxes; higher deductions for children and dependents and health care insurance.
-Reps should push fed vouchers for education and possibly for individual health insurance, plus special tax breaks & subsidies for “existing conditions”.
-This is the time to get conservative/ Rep “solutions” to normal people’s problems, using Fed money (as long as there are checks).
-Including building the Wall — and laughing, frequently, at the Dems complaining about the cost of the Wall when there are so many other wasteful programs.
– Far more Fed building and especially rebuilding/ maintenance of roads & bridges & electric grid; infrastructure.
The not-yet-catastrophic national debt is a “commons” resource — if Reps don’t use it, Dems will, like with Solyndra or other more wasteful schemes. The key Rep response is that “the return on this Rep program is positive, creating wealth, unlike the negative return on most Dem programs”.
Politics is downstream from culture — indoctrinated by decades of Harvard grads becoming professors and supporting the Dems while demonizing Reps. Even Lib Charles Murray, like Arnold Kling, is infected with the terrible idea of a Universal Basic Income. Politically, UBI will always end up paying people “who are unwilling to work”.
What is a “fair” tax regime? One where the income of the median worker is increasing faster than the income of the top 10%. If that’s not happening, lower taxes around the median, and higher taxes around top, are both justified.
The USA is better off with lower taxes around the median.
A cynical reader might think that these economists are angling for high status government positions when a left wing president is eventually elected.
Government should tax the rich more, because it can, and I’m not rich.
Government should spend more, because it can, and it’s free!
The problem … is that they all think money grows on rich people. —Stephanie Kelton
It’s not just about taxes on the rich but rather reducing their power and ability to game the system.
Higher taxes on the really wealthy dead people, like over $6 mln (100 years of median income) is also fine with me — can’t really argue that there is much of a disincentive to work because of higher estate taxes on capital gains income.
Getting income from capital — it’s like, once you have the capital, the money just grows like leaves on your capital tree.
Isn’t that why they call it capitalism?
But you can argue that the soon-to-be wealthy dead can, in the face of confiscatory inheritance taxes, change their actions. They can:
– Stop creating wealth (and jobs and taxes)
– Spend their money on their children’s education
– Use their money to set their children up in business
– Give their money to free market think tanks
Incentives matter.
Tax more, spend more, makes a certain sense if the spending program has a multiplier effect greater than one. Simply taxing to eliminate income inequality probably produces a negative multiplier. The other urgent social needs for which greater spending is needed are apparently health care. But of course those who want to spend more also say the problem with the US health system is that the US spends more than anyone else.
It is funny how the US also spends more than anyone else on education, with comparatively worse outcomes and returns both in relation to other countries and with regard to health where the US cancer survival rate is much better than other countries, but yet this is never decried as a crisis needing a fix.
The other big urgent need is apparently climate change. I sympathize with Bjorn Lomborg and others who advocate research funding for improved and more efficient means of producing electricity, but almost all avenues for such research have been banned in the US. No nuclear, no clean coal, no gas pipelines. The only acceptable alternative is to cover ever more hundres of thousands of acreage with black, heat absorbing, solar tiles and wonder why the temperature increases. Even the windmills take enormous amounts of carbon intense concrete. About 8000 acres of Virginia hill country is set to be converted to solar farm eyesore, yet we never hear the complaints that we would about a mine being opened. Just as “liberal” has come to mean “illiberal,” so too “green” has come to mean “black and brown” with the dominant enviro-zealot agenda being to undo the 15-20% of increased global vegetation mass and shrinking deserts produced by the relatively insignificant by historical standards increase in carbon dioxide gasses, and, to cover whatever cow pasture might be left with solar panels. Global warming has become a Santa’s sleigh of justifications for every authoritarian impulse under the sun.
God only knows how many ineffective and inefficient job training programs would be duplicated with the spending for “the left behind.”
It is hard not to surmise that the hard-left spending agenda will most likely have a negative multiplier and in any event will never reach one.
We should not be surprised. The religion of the totalitarian-nihilists have conquered the arts, journalism, entertainment, sports, education, and the tax system. The art of economics is not even speed bump on the road to the complete annihilarion of any semblance of a pluralist, secular democracy. Trump is but a death rattle. The best hope for the US is to follow the example of the USSR and disband. Some one of its successor state may keep human hope alive in North America during the coming dark ages. Civilization has move on though. Humanity’s future lies in the hands of Brazil and India.
“Brazil is the country of the future, and it always will be.”
Curiously enough, the foreign service diplomat and writer George Kennan basically argued that civilization would hang on in Brazil, too.
It’s in the first volume of his memoirs. He arrived in Brazil to find the opposition (were they communists?) had chosen him specifically to demonize as the known and designated enemy of the Brazilian people. Yet he was touched to find that he was at least to be provided a good Christian burial in their hateful propaganda.
It’s always hard to make predictions–especially about the future. But the stampeded toward fiscal irresponsibility does not inspire confidence.
My favorite (at the moment) doom and gloom scenario comes from John Schindler, here.
https://20committee.com/2015/03/02/yugoslavias-warning-to-america/
= – = – = =- =
He’s pretty obviously just too obsessed with the Balkans, and thus his mind automatically leaps there for comparison. The US was “a nation” early on–to de Tocqueville the Americans struck him rather like “queer Americans.” In contrast, Yugoslavia was pretty obviously not a nation but a “grotesque spatchcock of a nation.”
The chilling part of the USA at the moment is the fiscal irresponsibility combined with elite tactics that magnify rather than minimize racial / ethnic / class / religious differences. We see it here, too, not just in Yugoslavia or the old Habsburg Monarchy.
If we can all just strive to pay our own way and mind our business, the USA is a fantastic country despite its many quirks and flaws and inanities and injustices. But what politician can build a career telling the public to “pay their own way and mind their own business” ???
It seems pretty obvious by looking at the current political scene, or by reading the responses to this post that the 3 axis theory, while explaining a lot about political affiliations, explains almost nothing about policy affiliations. It may even produce a 4th meta-axis, which is an extreme revulsion for the oppressor/oppressed axis.
Look at the entries by Tom G or Edgar. They make no effort to connect to any sense of limited government policies. All they seek to do is to play out the decline of western civilization and go down swinging.
That sure sounds like the civilization/barbarism axis.
Maybe you can make your argument for that, but I see no hint of it. Where’s the conservatism? Where’s the defense of civilization?
I want us to go sideways, dodging the bullets, and building up Christian Capitalism.
Without Christianity, “capitalism” is a lousy thing to use for finding meaning in life – why are we here? (Coneheads say: “consume mass quantities”). This is where Libertarians are wrong. (It may include other religions as well, but “meaning” comes from the religion.)
Without market capitalism, the only sustainable system of wealth generation yet known, humans go thru cycles that include bouts of economic destruction like Venezuela is going thru now, or Zimbabwe went thru. The crony capitalism of Putin and China might prove to be sustainable over a few generations and multiple leaders, but I suspect not. It has created a lot of wealth for selected elites, without impoverishing the poor.
It’s true I’ve hugely reduced my own efforts to “limit gov’t” in policies — humans want an active, VISIBLE Hand, and vote for the visibility. Even when the invisible hand would increase their materialistic standard of living more than the coercive Visible Hand.
I see the socialist Big Gov’t takeover of colleges, and K-12 ed, and media, and gov’t, and increasingly Big Business — and the idea that more or “better education” is going to change folks against the Visible Hand seems … laughable? utterly unrealistic? merely utopian? or counter-productively opposed to improving the Visible Hand?
When I compare a lousy Job Guarantee to a lousy UBI, I’m convinced that the Job Guarantee, in practice, can be improved to work better. But the UBI, in practice, will increase the needy; since they become “unwilling to work”.
Richard correctly says: “Incentives matter”. The gov’t incentives are regulations, tax policies, and subsidies. Regs mostly restrict freedom for one reason or another. Tax policies raising gov’t revenue and push folk to change behavior some to avoid the taxes, but also pay a lot. Subsidies reward chosen behavior.
Voters want to be bribed with gov’t money, often to “do good”. I want the gov’t Visible Hand to support men and women getting married, having children, and working — and want to “bribe ” working people, with their own money, to do this.
building up Christian Capitalism.
Sorry, I am very dubious of this because:
1) Religion has been diminishing for decades (say 1960) so show me how this turns around. And outside of Israel, developed nations have all started moving away from religion.
2) Looking at Israel, I see two key differences: 1) They are in the middle of a Cold War. 2) They have a strong religious nationalist system that slowly moving towards segregated society.
2) How do you sell religion? There is no monetary gain and any libertarian should understand that will diminish.
3) There was a sense of community in the Any Griffin days. Most people could have attended the same church as their business leaders and they needed to attend church to be part of the community. (This is getting Andy Griffin Syndrome where it we imagine people actually lived like the show but there is some truth.)
I’d like to hear the Kling reaction to this part of Brad DeLong’s recent comments on Twitter:
Brad DeLong is saying it’s that Kentucky identity, culture, and blood+soil nationalism is bad while Mogadishu identity, culture, and blood+soil nationalism is good?
This also isn’t traditionally, “economics”. This is politics of race and culture and identity.
Did anyone actually believe we were going to cede everything on culture and that somehow we weren’t also going to cede everything on economics? Left on social issues and right on economics is always in the end left on both.
His Twitter feed is a wall of hatred.
P.S. Remember when the left was writing folk songs about people from Kentucky and was glad to have their votes. Never trust a leftist…ever. You are only raw material to them.
Wow. I avoid reading hateful content like that. I’m glad I haven’t read his feed further.
Cowen and Kling comment on DeLong’s economic arguments, but overlook this not so subtle hateful component. Maybe that’s out of politeness. I’m not trying to exaggerate or politicize this, but I’d like to hear Kling/Cowen discuss it.
The “little” in “little Mogadishu” is there for a reason. It’s not much different than “little Italy” or “little China”. Nobody thinks the existance of small ethnic communities in the US is a form of blood-and-soil nationalism. But “blood-and-soil American nationalism” is by definition a nationalism that is exclusive of other cultures. (That’s what the phrase blood-and-soil means.) It is also possible to have an American nationalism that isn’t culturally exclusive, but that’s not what Delong is talking about.
Yes, little Mogadishu is like little Italy and little China. They reference a specific geographic “soil” associated with a particular ethnic identity involving shared “blood” ancestry. When you combine the those, you get blood and soil.
Next, all identities are exclusive. If you are Christian you exclude Muslims, if you are Chinese you exclude Italian. Categories are exclusive. For example, with colors, red excludes blue.
No. Blood-and-soil specifically refers to a notion that a particular “soil” belongs to a particular “blood”.
I.e. German soil is only for German blood. American soil is only for American blood.
When Delong says “Kentucky-style American blood-and-soil nationalism” that is what he’s referring to – the notion that American soil belongs to people of a particular “blood” i.e. whites.
Secondly, identities can totally be overlapping. Otherwise there would be no Italian-Americans, or white Christians. Or female libertarians (though I’m told those don’t exist).
Personally I think of myself as a libertarian burner first, American second, and a white female third. Those are all overlapping identities.
Of course identities can overlap.
What I said was a simplification. I said “if you are Chinese you exclude Italian”, but you can be both. There are Chinese Italians, which usually means someone of Chinese descent and ethnicity who lives in Italy. I said “red excludes blue”, but the color purple has both red and blue. I knew this, but I try to make these comments short and to the point and not address lots of nuances like this.
You cite “female libertarians” which involves identities on two separate axes: a gender identity combined with a political identity. But typically, when viewing a particularly axis of identity, categories are still imperfectly exclusive; there is overlap and mixing, but still more of one category generally involves less of another category. You can have purple, but the more red, the less blue.
You cite a reasonable definition of “blood and soil”, not the only interpretation, but one I can accept.
When you cite Little Italy, Little China, and Little Mogadishu, I see a reference to an ethnic identity, which involves shared ancestry or blood, in a specific geographic soil. Maybe that isn’t precisely the same as your chosen definition of “blood and soil” but I don’t see an important moral difference. I presume “Little Mogadishu” excludes the Italian + Chinese identities, just like “Little China” excludes the Italian + Somalian identity.
The point is that many “little” ethnic enclaves can co-exist within an include definition of America, but “blood-and-soil American nationalism” cannot co-exist with “little Mogadishu” etc. That’s what makes “blood-and-soil American nationalism” bad, but “little Mogadishu” not bad. “Little Mogadishu” is not telling people in Kentucky that they don’t belong and shouldn’t be allowed to live in America.
Consider Israel or Japan or the Arab Gulf States like Qatar and UAE and Saudi Arabia, and realistically, most nations on Earth to a less obvious extent. They are all exclusive, prohibit large immigrations from Somalia, prohibit the formation of Little Mogadishus inside their borders, and make people who cherish the Mogadishu identify unwelcome. I presume you would find this similarly morally “bad” as American nationalism, but the political conversation has largely directed focus on US + Europe.
How about universities? Many government universities reject a majority of student applicants and make them feel unwelcome in pursuing their studies on campus. Is that similarly bad? Or is that justified?
Since it looks like the right has totally given up on the concept of fiscal conservatism and free markets under Trump, why not?
The left is correctly recognizing when it has won. There is no political opposition to a hard-left economic agenda, and thus no need to come up with a compromise, centrist position.
What you wrote simply isn’t true. Trump has mostly governed like a free market conservative. Yes, he pushed trade tariffs as did Obama, Bush, and Reagan, but I think that is overblown. Just last week according to WaPo, “The Trump administration released its 2020 budget request on Monday, proposing major cuts to federal government spending”.
It’s a fair criticism to say that the Trump Administration’s pushes for spending cuts have been more bark than bite. But he’s not pushing any of the more outrageous big spending, anti-market initiatives that you seen on the left, like Medicare for all, abolishing private health insurance, the Green New Deal, and Racial Reparations.
So your defense of Trump is that he’s merely ok with the current level of socialism, and not in favor of increasing the level of socialism. Also he’s in favor of more tarriffs (much more so than Reagan and Bush, btw). This is what counts as a “free market conservative” to you.
No, my defense of Trump isn’t limited to the status quo. But, actually, in comparison to the radical proposals I mentioned coming from the left, the status quo is, relatively speaking, extremely fiscally conservative and free market.
Trump’s war on regulation and the administrative state is a big deal. Trump has pushed for large cuts in spending, and as I said, I’m not convinced he’s really pushed those. Trump pushed some modest free market health care reforms that failed. That counts.
I can tell your a committed anti-Trumper, so I have low expectations that any of this info is new to you or will influence you at all.