Wednesday, December 05, 2012

The end of his story

By Carl 

Back in 1992, all-around idiot Francis Fukuyama posited the end of history. His rationale was, now that the Soviet Union was dead and the then-nascent Chinese economy was tooling up to be globally competitive, the ideology of liberal democracy married to capitalism would take hold and the world would enter a glorious era of unicorns and bunnies.

Twenty years on, it seems more a warped Peter Pan nightmarish scenario. Even America has lost the thread of that ridiculous ideology that Fukuyama posited after twelve years of Reagan/Bush.

Now, no one is disputing that more of the world has tended towards democracy in the past twenty years. One only need look back over the past decade, even just the past year, to see dictatorship after dictatorship topple and fall, either from internal forces such as the Arab Spring or external forces as the Gulf Wars.

But Fukuyama's point, that democracy is somehow the best political system for a nation's economics, has been thrown into disrepute, even just in America. The past twelve years have seen 99% of the nation fall far behind corporatist economic growth and since corporations control the democracy... well, would anyone posit that having the lowest possible tax rates on corporations has done anything to improve either the democracy or the economy?

Enter Josh Barro of Bloomberg. His dad is Robert Barro, one of the signal figures in macroeconomic policy, a man so adept at the field that it's his text book students read. A man who is now working on trying to codify how religion fits into the macroeconomic picture. So he has a deep background in economics.

Josh is a former fellow at the Manhattan Institute, a conservative think-tank -- the board of directors includes Bill Kristol -- so he's hardly a socialist. He seems to get it:

Conservatives do not have economic ideas that are good for the middle class. Since the 1970s, wage gains have decoupled from productivity gains and the median family has therefore reaped a disproportionately small share of the benefits of growth. Conservatives are left without anything to say about this problem.

What can they say about it? I have a few ideas, though I don't think conservatives are likely to like any of them too much.

What does he talk about?

The redistribution of wealth. Go read that again, I'll wait.

Josh approaches this issue from a conservative slant, to be sure, and I could take issue with some of the details of his broadly outlined solutions like means-testing welfare programs (seems duplicative, for one thing), but on balance, he makes a strong case.

Lower taxes and smaller government might raise GDP. Certainly over the Bush administration, growth happened. It was anemic but measurable. That was with historically low taxes. Josh's point was that this concentrated wealth in the hands of the rich, while leaving scraps and crumbs for the rest of us.

No trickle down, in other words. Given that this is the single talking point any conservative can raise when talking about stimulating the economy, Barro is essentially pointing out that conservatives have nothing.

Couple that with the fact that the lion's share in the current government economic transfers programs have been in aid to the elderly, which are not means-tested or adjusted for other income, basically, it's giving more of your hard earned money to wealthier people in two separate scoops: original economic activity, plus benefits accrued from your taxes.

What's most important about this piece is that Barro is representative of new, less insane One-Note-Johnny-On-A-Kazoo conservatives -- Reihan Salam also comes to mind -- with whom it might be possible to work alongside to move forward.

The conservative Republican base is falling apart as elderly white folks die off. This is why Republicans do well in off-year elections (voter turnout is lower which concentrates the vote to the elderly and more wealthy segments) but so poorly when the presidency is at stake.

Think about it: Over the past 20 years, Republicans have lost the popular vote for president 5 of 6 times.

Obviously, hammering home lower taxes is a recipe for failure (so are the social issue stances in a changing demographic, of course).

This is why it's so easy to dismiss the Republican stance on the "fiscal cliff," but if they smarten up and start promoting the Barros and Salams of the party, we have a tougher fight ahead of us.

Why? Because they aren't complete idiots like Fukuyama.

(Cross-posted to Simply Left Behind.)

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