Posted on 06/03/2013 6:16:26 AM PDT by Kaslin
Among the right-leaning policy wonks and intellectuals in Washington, there’s a lot of attention being given to the something called “reform conservatism.”
Underlying this school of thought is the notion that the Reagan-era message no longer works since Republicans have lost the popular vote in five out of the last six elections.
A few people have asked my opinion about this movement, and since Ross Douthat of the New York Times just put together a good description of this school of thought, it makes it easy for me to offer my thoughts.
But before digging into his column, I think that some of the angst on the right is misplaced. Why blame a Reagan-era message for GOP electoral problems when all the Republicans presidential nominees in recent years have favored big government? Does anybody really think that Bush 41, Dole, Bush 43, McCain, and Romney were Reaganites?!?
Could any of those candidates have given these remarks, at least with any credibility? Or made these comments in a sincere fashion? It’s much more plausible to say that Republicans have lagged because they didn’t have candidates with a Reagan-style message.
But let’s assume, for the sake of argument, that Republicans would have fared poorly even if Reaganites had been nominated. Does “reform conservatism” offer a path to electoral salvation.
Here’s what Douthat identifies as the “two major premises” of reform conservatism.
1. First, he writes that the “core economic challenge facing the American experiment is not income inequality per se, but rather stratification and stagnation — weak mobility from the bottom of the income ladder and wage stagnation for the middle class.” Conservatives, he says, should strive to make “family life more affordable, upward mobility more likely, and employment easier to find.”
2. Second, he warns that the “existing welfare-state institutions we’ve inherited from the New Deal and the Great Society, however, often make these tasks harder rather than easier: Their exploding costs crowd out every other form of spending, require middle class tax increases and threaten to drag on economic growth.”
I’m not an expert on income mobility, so I’m not sure I would identify stratification and stagnation as the nation’s core economic challenge, but he may be right. Regardless, it’s definitely a good idea to have more mobility.
And I definitely agree that the welfare state hinders upward mobility by creating dependency. And he’s right that this is a drag on growth. That being said, I disagree with his assertion that rising entitlement expenditures crowd out other spending and lead to middle class tax hikes. Those things may happen at some point, particularly once we get into the peak years for retiring baby boomers, but they haven’t happened yet.
The more important question, at least to me, is what sort of policies do reform conservatives embrace? Here’s Douthat’s list, bolded, followed by my thoughts.
a. A tax reform that caps deductions and lowers rates, but also reduces the burden on working parents and the lower middle class, whether through an expanded child tax credit or some other means of reducing payroll tax liability. 
b. A repeal or revision of Obamacare that aims to ease us toward a system of near-universal catastrophic health insurance, and includes some kind of flat tax credit or voucher explicitly designed for that purpose. I fully agree with repeal of Obamacare, and I think an unfettered marketplace would evolve into a system of near-universal catastrophic insurance, but I don’t want the federal government subsidizing or coercing that approach (though current healthcare policy has far more subsidies and coercion, so Douthat’s plan would be a big improvement over the status quo).
c. A Medicare reform along the lines of the Wyden-Ryan premium support proposal, and a Social Security reform focused on means testing and extending work lives rather than a renewed push for private accounts. I’m glad they embrace Medicare reform, but I’m puzzled by the hostility to personal retirement accounts. If you increase the retirement age and/or means test, you force people to pay more and get less, yet Social Security already is a bad deal for younger workers. So why make it worse? How can that be good for those with low mobility? Personal accounts would be akin to a tax cut for such workers since the payroll tax would be transformed into something much closer to deferred compensation.
d. An immigration reform that tilts much more toward Canadian-style recruitment of high-skilled workers, and that doesn’t necessarily seek to accelerate the pace of low-skilled immigration. As I noted in this interview, I very much favor bringing more high-skilled people into the country.
e. A “market monetarist” monetary policy as an alternative both to further fiscal stimulus and to the tight money/fiscal austerity combination advanced by many Republicans today. I try to avoid monetary policy. That being said, I’m a bit skeptical of “market monetarism.” No nation has ever tried this system, so it’s uncharted territory, and I’m reluctant to embrace an approach which is premised on the notion that bubbles can’t exist (what about the tech bubble of the late 1990s or the housing bubble last decade?!?). I’m also suspicious of a system which requires an activist central bank. Watch this George Selgin video if you want to know why.
f. An attack not only on explicit subsidies for powerful incumbents (farm subsidies, etc.) but also other protections and implicit guarantees, in arenas ranging from copyright law to the problem of “Too Big To Fail.” Amen. I fully agree.
Since I’m a tax policy wonk, let me address in greater detail some of the tax reform proposals put forward by reform conservatives.
Jim Pethokoukis of the American Enterprise Institute is identified in the column as a reform conservative, and he recently expressed skepticism about the flat tax in a column for National Review.
It’s an elegant, compelling model that might work splendidly if you were creating a tax code ex nihilo. …America, however, is in a much different place. Millions of individuals and businesses have made long-term plans based on expectations that the tax code will remain more or less the same. Half the nation, thanks to all those deductions and credits, pays no income tax. …it’s unlikely the U.S. can keep spending down at historical levels of 20 percent to 21 percent of GDP while also maintaining a floor for defense spending at 4 percent of output. The best a group of AEI scholars could manage was limiting spending to 23 percent of GDP by 2035.
No one since Reagan has uttered the magic words “get government off of your backs.” No sense tinkering with our
core beliefs until that is at least tried again IMO.
“Republicans have lost the popular vote in five out of the last six elections.”
But CONSERVATIVES have not lost the popular vote in 5 out of the last 6 elections. Squishy moderates have.
So we need “moderates” who are even more squishy?
The reason it has not worked in 5 of the last 6 is it hasn’t been used..................
Then it’s high time we start using it and make it work
gop lost every election because they were running AGAINST REAGAN and not running ON REAGAN!
LLS
“I very much favor bringing more high-skilled people into the country.”
Why? We don’t need more unemployed white collar workers.
Frankly the only immigration we should be encouraging is beautiful women to improve the gene pool.
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