The GOP's Stimulus Stance: Back to Goldwater?

Is it possible history is repeating itself? As House Republicans defy President Obama over his stimulus package, the party seems to be reverting to form after decades of overreaching ambition and outsized growth; think of the GOP, perhaps, as the Citigroup of politics. Many Republicans seem resigned—even content—to go back to being the party of Barry Goldwater. In other words: We don't care if we're marginalized. In our hearts we know we're right. Never mind that the party suffered terrible defeats in 2008 and 2006, some thoughtful Republicans (mainly on the Senate side, like Lindsay Graham, as well as intellectuals such as David Frum) have been fretting for some time that the GOP base is getting too narrow. These days, you hear little talk of Karl Rove's bigger tent or reinventing conservatism. Quite the opposite: it seems as though the party has decided to go back to basics. The message they're sending: "We don't care if Obama won or that he's popular; let's just wait until the country sees the truth again, as old Barry did. Until then, we'll be happy to be the righteous minority again, proudly willing to go down in flames for our beliefs: government spending never works, and tax cuts always do. Keynesian stimulus is for liberal witch doctors."

Until this moment, we have had an uneasy bipartisan consensus over how to solve the financial and economic crisis. As we saw with the approval of the $700 billion Troubled Asset Relief Program (TARP) last fall, most Republicans reluctantly went along with Bush's decision to "chunk" his "free-market principles," as he described the move. No more. True, Wednesday's unanimous GOP vote against the $819 billion stimulus package was partly driven by the peculiar politics of the Hill. Some House Republicans wanted to send a "message" to Obama, and they may come around and vote for the final bill after the Senate approves its version. But for many Republicans the vote reaffirmed the old philosophical divide. Never mind that Obama reached out, lunched with GOP leaders on the Hill, and pressed Speaker Nancy Pelosi to drop family planning and National Mall renovation. Not a single House Republican could bring himself or herself to vote with the president on a measure to prevent what could become the most serious recession since the 1930s.

Granted, there are some substantive problems with the House bill. Even Martin Feldstein, President Reagan's former chief economist, is in favor of a stimulus but says he can't support this particular measure. The tax cuts are too small and not targeted enough, and the spending portion won't create enough jobs, Feldstein argues in Thursday's Washington Post. Many Democrats are also unhappy with the paucity of infrastructure projects, among other things. But for many Republicans, the simple fact that the bill didn't contain 100 percent tax cuts and zero government spending appeared to be enough to prompt a "no" vote.

This is part of what is becoming a familiar political cycle. After the disastrous presidency of Herbert Hoover and the advent of the Great Depression, conservatives fell into a 50-year funk. Even their presidents didn't do right by them: Eisenhower was never considered a true believer, and Nixon drove way off the reservation by declaring himself a Keynesian. Robert Taft and a handful of others kept the flame alive, handing the minority torch off to Goldwater in the 1960s. That was how long it took for the New Deal era to play itself out—which ultimately it did. The Democrats' long dominance bred too much statist thinking, just as Hoover's Republicans had gone too far in favor of a laissez-faire approach to markets. An oversimplistic faith in Keynesianism contributed to decades of government gigantism and Democratic misrule (or as it was known back then, "stagflation"). That in turn led to the counterrevolution that ultimately brought Ronald Reagan to power in 1980, declaring "government is not the solution to our problem; government is the problem." Now two decades of runaway Reaganism—an excess of free-market zeal—have prompted the biggest government intervention since the New Deal. Cue the Keynesians again, and a Democratic resurgence. Responding to this ideological stimuli, the Republicans seem to be rooting around in their closets for their Barry pins.

In his Inaugural Address, Obama proclaimed "an end to the petty grievances and false promises, the recriminations and worn-out dogmas, that for far too long have strangled our politics." He said he wanted to move beyond "stale political arguments … The question we ask today is not whether our government is too big or too small, but whether it works." That sounded about right to me, at least in terms of dealing with the crisis nature of the times. It is also smart, at this dire moment, to be trying to learn a few lessons from the past. Obviously we don't want to go back to the excesses of the long era of Democratic dominance and overspending—the New Deal-Great Society/Vietnam continuum—but neither can we simply return to the Republican era of Reaganite deregulation (especially of financial markets). It's clear we need to do some serious rethinking of the best ways to make capitalism work, moving beyond both FDR and Reagan.

But reaching a new consensus would require a reassessment of basic premises, and it appears, at least for the moment, that there will be very little of that. The emerging Republican consensus suggests that Bush grew so unpopular because he strayed from, rather than stood behind, the old GOP verities by creating a vast national-security state and giant deficits. Hence the Republicans are flocking to a proposal by the House Republican Study Committee calling for no new government spending at all, and nothing but tax cuts instead. A little over a week after Obama's inauguration, "stale" political arguments again rule the day. So much for the post-partisan era.