AMERICAN CONSERVATISM IN 2008 AND BEYOND

There is my argument and why I would oppose a blanket government regulation forbidding a community from doing whatever it must do to attract new commerce and industry.

Jeff Frankel's Weblog

What Does It Take to Define Away the Statistics Showing Superior Economic Performance Under Democratic Presidents than Under Republicans?

Monday, September 15th, 2008
By Jeffrey Frankel

Economic Policy Institute, September 2008.

A panel on Supply Side Economics in Washington, September 12, included statistics on the superior performance of the American economy under President Clinton compared to his Republican successor. (The graph to the right, from Ettlinger & Irons, shows the first term of each administration. The growth gap widened subsequently.) Former Treasury Secretary Larry Summers gave some statistics that included Democratic versus Republican presidents throughout the postwar period. (The event was jointly sponsored by the Center for American Progress and the Economic Policy Institute.)

By coincidence, in a column in that day's Wall Street Journal, Donald Luskins sought to "get something settled once and for all. Have the stock markets and the economy historically done better under Democrats or Republicans?"

Here is what he wanted to straighten us out on: "Superficially at least, the Democratic claims are true: Since 1948, the Standard & Poor’s 500 total return (capital gains plus dividends) has averaged 15.6% when a Democrat was in the White House and only 11.1% when a Republican was in the White House. You get a similar result if you look at growth in real gross domestic product. Under Democratic presidents, the average since 1948 has been 4.2%. Under Republican presidents it has been only 2.8%." But then he goes on to argue that Kennedy should really be classified as a Republican (he cut taxes), Nixon as a Democrat (wage-price controls), George H.W. Bush as a Democrat (he raised taxes), and Bill Clinton as a Republican (free trade; and he might have added eliminating the budget deficit, supporting the Fed, reforming welfare, other policies that would normally be thought of as conservative). He argues that if you make these switches in party assignments, then the US stock market and economy has performed better under "Republican" presidents (which, remember, now includes Kennedy and Clinton) than under "Democrats" (which now includes Nixon and the first Bush).

I am still not sure whether the column was meant as a joke. At the risk of finding out that I have been taken in by a prank, I will assume that the author is serious. Brad de Long picked this one up right away, and thinks the author is serious. (Luskins, it turns out, is the guy who has apparently devoted much of his adult life to attacking Paul Krugman.) But Brad didn't offer any sort of detailed rebuttal. I suppose one could argue "live by ad hominem, die by ad hominem." But I think blogosphere courtesy, such as it is, calls for a substantive reply.

My first response is to point out that the Nixon, Bush and Clinton policies he cites are not isolated cases, but appear on a longer list of examples I like to give showing how for the last 40 years, rhetoric notwithstanding, Republican presidents have pursued policies that are surprisingly farther removed from the ideal of good neoclassical economics than have Democratic presidents. This is especially true if one defines neoclassical economics as the textbook version, which allows government intervention for externalities, monopolies, etc. But I would argue that it applies even to the "conservative economics" version that puts priority simply on small government.

The criteria underlying this generalization about Republican presidents are:
(1) Growth in the size of the government, as measured by employment and spending.
(2) Lack of fiscal discipline, as measured by budget deficits.
(3) Lack of commitment to price stability, as measured by pressure on the Fed for easier monetary policy when politically advantageous.
(4) Departures from free trade.
(5) Use of government powers to protect and subsidize favored special interests (such as agriculture and the oil and gas sector, among others).

I have documented in writings listed elsewhere that Republican presidents have since 1971 indulged in these five departures from "conservatism" to a greater extent than Democratic presidents. The name I would give to this set of departures, as well as to the parallel abuses of executive power in the areas of foreign policy (intervening in Iraq) and domestic policy (intervening in people's bedrooms), is neither "liberal" nor "conservative" but, rather, "illiberal."

My second response is to point out that the author is re-defining "Republican" and "Democrat" tautologically to be "good" or "bad." A definition that departs so far from actual party affiliation does unacceptable linguistic violence. And of course it is circular logic to then find that the economy does better under "Republican" presidents than "Democratic."

An analogy: Marx and Engels of course professed to have the welfare of the common man as their goal. The Soviet Constitution asserted that the USSR expressed "...the will and interests of the workers, peasants, and intelligentsia." It claimed to embody democracy, the rights of freedom of speech, freedom of the press, freedom of assembly, freedom of religion, inviolability of the person and home, and the right to privacy. Needless to say, this was all pure rhetoric, which was continuously and comprehensively violated by the actual operations of the Soviet state. But by Luskins' logic, the western democratic system, which did put these ideals into practice should be re-classified as communist, and the superior performance of the western system should be chalked up as going to the credit of communism! It makes no more sense to credit the achievements of Bill Clinton to the Republicans than it would to credit the achievements of western democracy to the Communists.

Harry Truman was a different kind of President He probably made as many important decisions regarding our nation's history as any of the other 42 Presidents. However, a measure of his greatness may rest on what he did after he left the White House.

The only asset he had when he died was the house he lived in, which was in Independence Missouri . His wife had inherited the house from her mother and other than their years in the White House, they lived their entire lives there.

When he retired from office in 1952, his income was a U.S. Army pension reported to have been $13,507.72 a year. Congress, noting that he was paying for his stamps and personally licking them, granted him an 'allowance' and, later, a retroactive pension of $25,000 per year.

After President Eisenhower was inaugurated, Harry and Bess drove home to Missouri by themselves. There were no Secret Service following them.

When offered corporate positions at large salaries, he declined, stating, "You don't want me. You want the office of the President, and that doesn't belong to me. It belongs to the American people and it's not for sale."

Even later, on May 6, 1971, when Congress was preparing to award him the Medal of Honor on his 87th birthday, he refused to accept it, writing, "I don't consider that I have done anything which should be the reason for any award, Congressional or otherwise."

As president he paid for all of his own travel expenses and food.

Modern politicians have found a new level of success in cashing in on the Presidency, resulting in untold wealth. Today, many in Congress also have found a way to become quite wealthy while enjoying the fruits of their offices. Political offices are now for sale.

Good old Harry Truman was correct when he observed, "My choices in life were either to be a piano player in a whore house or a politician. And to tell the truth, there's hardly any difference."

Jewish World Review Dec. 17, 2008
Postponing reality
By Thomas Sowell

Some of us were raised to believe that reality is inescapable. But that just shows how far behind the times we are. Today, reality is optional. At the very least, it can be postponed.


Kids in school are not learning? Not a problem. Just promote them on to the next grade anyway. Call it "compassion," so as not to hurt their "self-esteem."


Can't meet college admissions standards after they graduate from high school? Denounce those standards as just arbitrary barriers to favor the privileged, and demand that exceptions be made.


Can't do math or science after they are in college? Denounce those courses for their rigidity and insensitivity, and create softer courses that the students can pass to get their degrees.


Once they are out in the real world, people with diplomas and degrees" but with no real education" can hit a wall. But by then the day of reckoning has been postponed for 15 or more years. Of course, the reckoning itself can last the rest of their lives.

Every weekday NewsAndOpinion.com publishes what many in the media and Washington consider "must-reading". HUNDREDS of columnists and cartoonists regularly appear. Sign up for the daily update. It's free. Just click here.



The current bailout extravaganza is applying the postponement of reality democratically" to the rich as well as the poor, to the irresponsible as well as to the responsible, to the inefficient as well as to the efficient. It is a triumph of the non-judgmental philosophy that we have heard so much about in high-toned circles.


We are told that the collapse of the Big Three automakers in Detroit would have repercussions across the country, causing mass layoffs among firms that supply the automobile makers with parts, and shutting down automobile dealerships from coast to coast.


A renowned economist of the past, J.A. Schumpeter, used to refer to progress under capitalism as "creative destruction"" the replacement of businesses that have outlived their usefulness with businesses that carry technological and organizational creativity forward, raising standards of living in the process.


Indeed, this is very much like what happened a hundred years ago, when that new technological wonder, the automobile, wreaked havoc on all the forms of transportation built up around horses.


For thousands of years, horses had been the way to go, whether in buggies or royal coaches, whether pulling trolleys in the cities or plows on the farms. People had bet their futures on something with a track record of reliable success going back many centuries.


Were all these people to be left high and dry? What about all the other people who supplied the things used with horses" oats, saddles, horse shoes and buggies? Wouldn't they all go falling like dominoes when horses were replaced by cars?


Unfortunately for all the good people who had in good faith gone into all the various lines of work revolving around horses, there was no compassionate government to step in with a bailout or a stimulus package.


They had to face reality, right then and right there, without even a postponement.


Who would have thought that those who displaced them would find themselves in a similar situation a hundred years later?


Actually the automobile industry is not nearly in as bad a situation now as the horse-based industries were then. There is no replacement for the automobile anywhere on the horizon. Nor has the public decided to do without cars indefinitely.


While Detroit's Big Three are laying off thousands of workers, Toyota is hiring thousands of workers right here in America, where a substantial share of all our Toyotas are manufactured.


Will this save Detroit or Michigan? No.


Detroit and Michigan have followed classic liberal policies of treating businesses as prey, rather than as assets. They have helped kill the goose that lays the golden eggs. So have the unions. So have managements that have gone along to get along.


Toyota, Honda and other foreign automakers are not heading for Detroit, even though there are lots of experienced automobile workers there. They are avoiding the rust belts and the policies that have made those places rust belts.


A bailout of Detroit's Big Three would be only the latest in the postponements of reality. As for automobile dealers, they can probably sell Toyotas just as easily as they sold Chevvies. And Toyotas will require just as many tires per car, as well as other parts from automobile parts suppliers.
http://www.jewishworldreview.com/cols/sowell121708.php3

To Ican and Okie, I do think we are in more agreement than disagreement

"The party is teetering on the edge of complete anarchy," said one senior Republican strategist. The source added that the race to date has "divided a party that desperately needs to add not subtract."

Is bailing out the banks a conservative idea? I thought thats what marxists do? You'll be having the state prop up car manufacturers instead of letting them go bust next.