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The Elusive, Fairly Reasonable Republican

Paul Krugman: The GOP went all-in for expansionary austerity and looming hyperinflation, and has shown no hint of learning from actual events.

As we all know, there are three kinds of economists. There are liberal professional economists; there are conservative professional economists; and there are professional conservative economists (a.k.a. right-wing hacks). Surely, you say, there must be four kinds? Not really – there just isn’t enough money on the left, an asymmetry that gives rise to the well-known “hack gap.”

Anyway, among the conservative professional economists there is a sub-class one might call “Republicans in their minds only”: fairly reasonable economists living in a political fantasy world, who imagine that the modern Republican Party is composed of people like themselves, who might be receptive to pragmatic arguments that don’t fully correspond to dogma. These economists are, you might say, like men from Mars, who have no idea how the political culture on planet Earth actually works these days.

Martin Feldstein, a professor at Harvard who was chairman of the Council of Economic Advisers under President Ronald Reagan, would be a prime example. In one sense he is a true Republican: He has been furiously opposed to expansionary monetary policy since 2009, and remains so even though his original argument – that it would produce runaway inflation – has been wrong for almost five years. But he is sympathetic to the idea of fiscal stimulus, and in a recent op-ed for The New York Times he called for a bipartisan deal that would involve a trillion dollars of stimulus via infrastructure spending in return for long-term deficit reduction.

What can I say? It’s not just that Republican leaders would never consider such a deal – they are in fact still committed to the view that spending cuts are expansionary. It’s also that (this is obvious to anyone who hasn’t spent the past five years on Mars) Republicans don’t care about the deficit, and never did – it was always just a club that they made use of in their effort to dismantle Medicare and Social Security.

I wish I lived on Marty’s planet. But I don’t, and neither does he.

Empty Boxes of Political Economy

Mr. Feldstein is a perfectly ordinary Keynesian who believes – as he should – that expansionary fiscal policy is expansionary. And he’s under the delusion that there are people who have political influence on the right who might be persuaded to support temporary fiscal stimulus.

The economics commentator Ramesh Ponnuru, it seems, falls into the same general category. In a column for Bloomberg, he recently called on Republicans to abandon their “inflation paranoia” – their continuing insistence that the Federal Reserve’s efforts to boost the economy will produce a debased dollar and runaway inflation any day now, even though they have been wrong, year after year.

Like Mr. Feldstein, Mr. Ponnuru is appealing to the economically sensible wing of the G.O.P. But that wing doesn’t exist. Think of it as a matrix, like the one on this page.

Clearly, the big ideological divide in America is between people who want to maintain the welfare state and maybe expand it a bit, and those who want to shrink it sharply. At the same time, there is a divide between people who buy into more or less sensible economics – as defined by the standard textbooks, or if you prefer, by what the supposedly representative group of economists regularly surveyed by the University of Chicago’s school of business has to say – and those holding views most professional economists consider crankish.

In principle, there could be a significant number of politicians in all four boxes: say, liberals who believe in the superiority of central planning over markets, or conservatives who nonetheless believe that Keynes had a point. In practice, left-wing cranks have never played a significant role in American politics, while right-wing cranks always have.

Still, back in the days of President George H.W. Bush – and even, to some extent, in the days of Bush the lesser – there were politicians in the lower left box. But no more. The G.O.P.’s top policy wonk, Paul Ryan – he’s actually innumerate, but don’t tell anyone – gets his ideas on monetary policy from an Ayn Rand character. The G.O.P. went all-in for expansionary austerity and looming hyperinflation, and has shown no hint of learning from actual events. The only people listening to Mr. Feldstein and Mr. Ponnuru are, well, liberals.

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