Page Two: In the Red
Republican plans for economic recovery could make things worse
Even though the position outlined above fulfills a pure ideological vision, in very real terms, it could make the economic situation much worse. What is worrisome in the most practical, business-oriented sense is the possibility that conservatives, caught up in the grip of partisan fantasies, are wrong – wrong about the cause of the recession, wrong about the current state of the economy, and wrong about cures.
One of the problems with sloganeering, no matter your ideological preferences, is that it denies subtlety while insisting that any disagreement with it is shallow and two-dimensional. Word is that in the Bush White House, before the invasions of Afghanistan and Iraq, those advocating that there should be planning for what would happen in those countries post-invasion were considered to be anti-war partisans. Even with the most administration-friendly vision of what was going to happen, regardless of the success of the invasions, postwar reconstruction required dealing with incredibly complex situations accompanied by substantial costs. Nation rebuilding is so vast and expensive an undertaking that even if those designated to think about what needed to be done were strong war advocates, they might have second thoughts. The solution was not to think about it.
Driving the right's vision is the belief that the economic and regulatory atmosphere in this country has become so toxic that business leaders and investors are unwilling to expand their companies or create new ones. This assumes that the government almost single-handedly caused the recession, and its attempts at providing stimulus have instead kept it crippled.
The economic collapse was so massive that there are very few relevant business entities, government agencies, and/or members of either political party that don't deserve a significant share of the blame. The argument is often made that if job creators are overtaxed, they will stop creating jobs. In this case, there is no abstract speculation as to consequences – only rock-solid reality.
Excepting its insane spending binge, the Republican-controlled government of the George W. Bush era fulfilled the conservative vision. Regulations, especially those affecting businesses, were defanged or unenforced. Bush passed substantial tax cuts that were most beneficial to the richest Americans. After six years of the Republicans being in power, the result of their "pro-business" agenda was a massive failure of financial institutions, a complete economic collapse, and the federal budget going ever more deeply into the red. There was no economic boom but instead an almost unprecedented bust.
My fears for the future have everything to do with economic realities but very little to do with ideology. The Republican plan to save the economy seems unlikely to work.
Cutting government spending inherently and invariably means cutting jobs. As spending cuts are initiated, the number of unemployed grows. Rising unemployment breeds more unemployment. Maintaining the tax cuts or even increasing them means that the country's budget will continue to run an even greater and growing deficit. Undoing regulations, most of which are neither onerous nor unnecessary, takes time.
No matter how quickly those changes happen, it won't be very quick at all. Some businesspeople may gamble on the future, but most won't. All these "solutions" – cutting government spending, cutting taxes, undoing regulations – create almost no new jobs in the short term. The argument is that by doing those things you create the best environment for job growth. If that environment takes years before it begins to nurture the economy, what shape will the country be in when and if that finally starts to happen? If to get to that place you create even more unemployment and have an even more terribly unbalanced budget, doesn't it becomes iffy whether things will hold together long enough for this conservative economic spring to ever actually occur?