Reaganism Is A Series Of Claims About The World That Have Turned Out To Be False

In an argument with a Reaganist last evening I asserted that the difference between American political parties wasn't about values, or priorities, or religion, or Real Americans. The difference is that the Reaganist platform contains a series of empirical claims about how the world works that are, as it turns out, false.

"Name a writer who takes that view!"

I guess I can't name myself, can I? Well, I think the best place to start is Jonathan Chait and his "Fact Finders" piece in The New Republic back in 2005:

But, for a true conservative, whatever ends they think smaller government may bring about--greater prosperity, economic mobility for the non-rich--are almost beside the point. As Milton Friedman wrote, "[F]reedom in economic arrangements is itself a component of freedom broadly understood, so economic freedom is an end in itself."

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This doesn't mean that conservatives don't believe their own empirical arguments. Nor does it mean that ideologically driven thinking can't lead to empirically sound outcomes. In many cases--conservative opposition to tariffs, price controls, and farm subsidies--it does. But empirical reasoning simply does not drive their thinking. What appears to be conservative economic reasoning is actually a kind of backward reasoning. It begins with the conclusion and marches back through the premises.

Consider the conservative view of health care. Conservatives repeat the mantra that the United States has "the best health care system in the world"--a formulation used endlessly by President Bush. That isn't true by almost any objective measure. The United States devotes a far higher share of its economy to health care than any other country. Yet, according to the most recent World Health Organization study, the United States ranks just 37th in overall health care performance. These massive inefficiencies derive in part from our huge numbers of uninsured. The uninsured end up forgoing treatment until they arrive at the emergency room. Basic preventive care, of the sort universally available in every other advanced country, would avert such disasters--at less cost to the economy and with less suffering and fatality for patients.

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[Paul] O'Neill, the former Bush Treasury secretary, mourns [in his memoir] that administration's hostility to expertise and fact-driven debate. "You don't have to know anything or search for anything," he says of the ideologues in the administration. "You already know the answer to everything. It's not penetrable by facts. It's absolutism."

But Chait's point is more limited than mine. He is looking at a couple of policies where the GOP defines "freedom" as "freedom to contract" and comes up with economic justifications for that predetermined policy choice. My claim is not concerned with the causes of specific mistakes, but rather that, for a variety of reasons, being wrong is endemic to the GOP platform. At bottom, Chait believes that there is an important connection between Republican ideology and Republican policy choices, where I reject the notion that ideology has anything to do with voter policy preferences. The problem isn't that the GOP elites are wrong about "freedom" (even though they are), the problem is that GOP elites and voters are confused about how the world works.

For example?

Wrong about trade-off between redistribution and growth:

The conclusion that emerges from the historical macroeconomic data used in this paper is that, on average across countries and over time, the things that governments have typically done to redistribute do not seem to have led to bad growth outcomes. Quite apart from ethical, political, or broader social considerations, the resulting equality seems to have helped support faster and more durable growth. 

Wrong about the effect of changing the tax rates of the rich:

Looking at top tax rates since 1945, economist Thomas Hungerford (2012) found a positive but statistically insignificant relationship between higher tax rates and a higher ratio of private savings to potential GDP, concluding that the evidence suggests “top tax rates are not associated with private saving.”18 Similarly, he found the relationship between top tax rates and investment as a share of potential GDP to be statistically insignificant. Looking back to the period of high tax rates predating his analysis, Hungerford’s results are consistent with interwar estimates by Romer and Romer (2012) finding “no evidence that cuts in marginal tax rates increased machinery investment or business construction.”

Wrong about the incentive effects of unemployment insurance on both workers and economy:

But the big takeaway is how little correlation there is between unemployment rates and unemployment benefits. Relatively less generous benefits haven’t saved Greece nor have generous benefits doomed Israel. That’s not to say that better benefits don’t affect incentives at the margin — they do. But what rocked the global economy in 2008 was the mother of all demand shocks.

Wrong about "big government" and unions hurting the economy. Compare the recent experience in Minnesota and Wisconsin:

But in 2010 these cousin states diverged. By doing so they began a natural experiment that compares the agendas of modern progressivism and the new right. Wisconsin elected Republicans to majorities in the Legislature and selected a bold and vigorous Republican governor, Scott Walker. Minnesotans elected one of the most progressive candidates for governor in the country, Mark Dayton of the Democratic-Farmer-Labor Party.

A month after Mr. Walker’s inauguration in January 2011, he catapulted himself to the front ranks of national conservative leaders with attacks on the collective bargaining rights of Civil Service unions and sharp reductions in taxes and spending. Once Mr. Dayton teamed up with a Democratic Legislature in 2012, Minnesota adopted some of the most progressive policies in the country.

Minnesota raised taxes by $2.1 billion, the largest increase in recent state history. Democrats introduced the fourth highest income tax bracket in the country and targeted the top 1 percent of earners to pay 62 percent of the new taxes, according to the Department of Revenue.

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Three years into Mr. Walker’s term, Wisconsin lags behind Minnesota in job creation and economic growth. As a candidate, Mr. Walker promised to produce 250,000 private-sector jobs in his first term, but a year before the next election that number is less than 90,000. Wisconsin ranks 34th for job growth. Mr. Walker’s defenders blame the higher spending and taxes of his Democratic predecessor for these disappointments, but according to Forbes’s annual list of best states for business, Wisconsin continues to rank in the bottom half.

Along with California, Minnesota is the fifth fastest growing state economy, with private-sector job growth exceeding pre-recession levels. Forbes rates Minnesota as the eighth best state for business. Republicans deserve some of the credit, particularly for their commitment to education reform. They also argue that Minnesota’s new growth stems from the low taxes and reduced spending under Mr. Dayton’s Republican predecessor, Tim Pawlenty. But Minnesota’s job growth was subpar during Mr. Pawlenty’s eight-year tenure and recovered only under Mr. Dayton.

 

Wrong about how best to promote family values like marriage:

Conservative White America has failing families. Divorce rates are highest in the "Bible Belt" states where Conservative White America is strongest. While professional whites (who are often liberals) have reversed the trend toward higher divorce, working-class whites are essentially abandoning marriage. While conservatives would claim that this trend is due to the spread of liberal, secular values, the reverse is true; Bible Belters get married more often and earlier than their Northeastern cousins. They just get divorced a lot. Those conservative values are shoving white people, especially working-class white people, into unhappy marriages that cannot last in the modern world.

Wrong about who abuses drugs:

Additionally, suburban and rural drug use may be rising, even as urban drug use has fallen steadily. And white teens are more likely than black or Hispanic teens to abuse drugs. These trends do not bode well for the health of Red America.

Wrong about how to promote the American Dream:

Add to that failing economic mobility. Much is made of the economic dynamism of Red states like Texas (well, mainly Texas). But white Americans experience the least economic mobility in the South, the most conservative region. And upward mobility for whites seems to be lowest in regions with heavy sprawl.

 

Wrong about the efficacy of the war on poverty:

Our current approach to calculating poverty is so full of holes that, for the past few years, the Census Bureau has produced an alternative number known as the "supplemental poverty measure" or "SPM"—which is bone-dry government speak for "the statistic you should really be paying attention to." Think of it as the official poverty rate's smarter, more realistic cousin. On the one hand, it accounts for additional expenses, like medical care and regional variations in housing. On the other, it better incorporates government benefits, like food stamps and housing subsidies. In the end, it usually comes out to be a little less than a percentage point higher than the official poverty rate.

That might not seem like an enormous difference, but what happens when the Census's new method is stretched back through time? That's what a group of researchers from Columbia University sought to find out in a pair of recent papers. They conclude that a) The U.S. has done a far better job fighting poverty than the official rate lets on and b) the safety net has played a key role in that success.

Wrong about education being the solution to inequality of opportunity:

[T]he once-enormous gap in high school graduation rates... [has been] growing more equal.

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Unfortunately, the racial gap in median household income remains about as large as ever.

Wrong about the role of the government in innovation:

In Mazzucato’s account of the enormous success of federal scientific and technical research as the foundation of the most revolutionary of today’s technologies, the most telling example is how dependent Steve Jobs’s Apple was on government-funded breakthroughs. Apple’s earliest innovations in computers were themselves dependent on government research. But by the 1990s, sales of its traditional laptops were flagging. The launch of the iPod in 2001, which displaced the once-popular but more limited Sony Walkman, and in 2007 of the touch-screen systems of the new iPhone and iPad, turned the company into the electronic powerhouse of our time. From that point, its global sales almost quintupled and its stock price rose from roughly $100 to more than $700 a share at its high.

These later breakthroughs were almost completely dependent on government-sponsored research. “While the products owe their beautiful design and slick integration to the genius of Jobs and his large team,” writes Mazzucato,

nearly every state-of-the-art technology found in the iPod, iPhone and iPad is an often overlooked and ignored achievement of the research efforts and funding support of the government and military.