Tea Party has morphed culture wars into economic combat

September 15, 2011

By Nicholas Wapshott
The opinions expressed are his own.

As Margot Channing put it in All About Eve, “Fasten your seat belts. It’s going to be a bumpy night.” The battle over Obama’s jobs bill marks the opening of the Keynes Hayek election, which, if the poisonous duel between the two giants of economics is anything to go by, will be a down and dirty clash of opposites. Obama will champion intervening in the economy to get Americans back to work, while his rival will demand a shrunken government and the speedy repayment of the national debt.

The first shots in this snarky contest have already been fired. Take Obama’s dismissal, in his speech to both houses of Congress, of the Hayekian notion that government is too costly and largely unnecessary: “This larger notion — that the only thing we can do to restore prosperity is just dismantle government, refund everybody’s money, and let everyone write their own rules, and tell everyone they’re on their own — that’s not who we are. That’s not the story of America.” Obama finds himself defending the whole of the Democrats’ progressive record, from Roosevelt’s New Deal to Johnson’s Big Society.

Most aggressive in his assault upon Keynesianism is Rick Perry, who declared in the Reagan Library last week that Obama “has proven for once and for all that government spending will not create one job. Keynesian policy and Keynesian theory is now done. We’ll never have to have that experiment on America again.” Gingrich, too, thinks “the American people create jobs, not government.” Most Hayekian is Ron Paul, who said his first act in the White House would be to “bring a course in Austrian economics to teach the people the business cycle and why the Fed creates inflation and depressions and all our unemployment problems.”

The GOP, once the home of Chicago School economics, has drifted away from what in retrospect looks like the sweet reason of Milton Friedman. Fed chairman Ben Bernanke, a devout Friedman acolyte, is still reeling from being accused by Perry of being “treacherous” and “treasonous,” and finds himself now on the hit list of most Republican champions, who take it in turns to boast they would fire him because, in Newt Gingrich’s words, “his policies have deepened the depression, lengthened the problems, increased the cost of gasoline, and been a disaster.” Even the once moderate Romney says, “I’d be looking for somebody new.”

To become the nominee, the wannabes have first to please the Tea Party that has taken over from the Christian Right as the main drivers of Republican sentiment. Devotion to economic conservatism and a tilt toward libertarianism has replaced social conservatism as the loyalty test by which contenders are judged. Perry launched his campaign with the boast that he wanted to “make Washington, D.C., as inconsequential in your life as I can.” Paul went one further, declaring, “We don’t need the government running our lives” and even saying that “9/11 came about because there was too much government.”

Not even the most ambitious Republican candidate is expecting to reach a government-free nirvana in a single term, but from their utterances we are now getting a good glimpse of what, if the tide has really turned against Keynes, a small-government America might look like. First, there would be no universal health care, the touchstone pledge of all who want to reverse eighty years of government big spending. Second, the federal government would devolve as many powers as possible to the states, which would slash the costs of mandated programs then further minimize influence on people’s lives wherever they could. Third, Social Security would be privatized and pension provision left to individuals. Fourth, welfare would be cut and good works for the poor and the needy left to charities and churches. Fifth, government departments such as Homeland Security and agencies like the TSA would be disbanded. Sixth, America would cede its role as the world’s policeman and withdraw smartly from Afghanistan and Iraq.

Can a candidate be elected on such a program? First, Perry or Paul or Michelle Bachmann would have to overcome the qualms of the less radical portion of the GOP. As Rick Santorum put it, “Are we going to stand in the Reagan tradition, or are we going to go the isolationist view that some in this party are advocating?” The flexible Mitt Romney, who, in his eagerness to appear all things to all men said, “If the Tea Party is for keeping government small and spending down … then, hey, I’m for the Tea Party,” also said, “We have always had, at the heart of our party, a recognition that we want to care for those in need, and our seniors have the need of Social Security.”

It may be a case of ideological purity versus electability. John Huntsman, the most conventional of the contenders, warns, “We can’t run from mainstream conservative philosophy. We’ve got to win voters.” Tea Party members, however, are in no mood for compromise, a fact that points toward Perry, thought most electable by Republicans, as the likely standard bearer. But, as always, it will be the voters’ verdict on the incumbent as much as the detail of the challenger’s policies that will settle the matter. With Obama’s jobs initiative falling flat and Democratic support for him flagging, the polls are currently favoring a win for Hayek over Keynes.

Nicholas Wapshott’s “Keynes Hayek: The Clash That Defined Modern Economics” is published by W. W. Norton in October. Read an extract here.


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

Johnson’s “Big” Society! Oh my.

Posted by PCScipio | Report as abusive

It’s about damb time this country came to it’s senses.
Goveernment does not “Produce” anything. Government just gets in the way of job creation. Government is suppose to protect us from the Enron’s of America but, fail at even doing that so, why would anyone want more FAILED government. USPS, Fannie & Freddie, Solyndra and the list goes on and on. What exactly has FEMA,DOE, TSA, FED and other organizations done to protect Amercians? Not much. All they do is waste our tax dollars!

Posted by C4LCNCPLS | Report as abusive

C4LCNCPLS, I also noticed that workers who want a decent wage also get in the way of job creation. It’s getting harder and harder to be a capitalist!

Posted by PCScipio | Report as abusive

[…] In the 2012 election, Obama will champion intervening in the economy to get Americans back to work, while his Republican rival will demand a shrunken government and the speedy repayment of the national debt.  ary […]

Posted by Obama to exclude Social Security from deficits plan – Top news – Financial news | Report as abusive

The libertarianism espoused by the likes of Paul is nothing but the wolf of anarchy dressed for polite society. It represents a fundamental misunderstanding of the world and problems we face. These anarchists live in an imaginary universe where Ayn Rand Arthur Laffer make sense, other nations do not threaten us, and 2+2=5.

Without the government we would have no interstate highway system, no internet, no air traffic system, and a banking system which would fail as regularly as the sun rises. We would become an economic basket case begging the Chinese to use American slave labor.

Libertarians are unhinged and divorced from reality.

Posted by Gaius_Baltar | Report as abusive

A Tea Party candidate will not get elected.

The Republicans are making fools of themselves tripping over God and how best to attack Obama.

But they are extremely thin on workable solutions.

It is easy to cast stones (which is all they are doing) but far more difficult to create and implement solutions (which none of them are doing).

Take the raw Republican approach they are espousing and increased poverty, increased crime, increased death, increased healthcare costs, increased pollution, increased financial corruption, and the destruction of the economy are all relative certainties.

Posted by NobleKin | Report as abusive

@Gaius_Baltar, you insult anarchism and anarchists by linking them to libertarianism.

Posted by vinlander | Report as abusive

The Republicans say we should do away with government.

I say, Well, OK. But the first part of government to go should be the County Clerk’s offices where all the property records and land deeds are administrated by government workers.

An infant is born to a wealthy family today, and instantly has a bright future only because of pieces of paper, like land deeds and bonds. Those deeds mean nothing without the government workers at the County Clerk’s office, and the government workers at the police department. Their intrinsic value is zero.

So if the Republicans want to do away with government, then I say, sit back and watch their deeds to Manhattan, and Chicago, and Los Angeles go up in flames.

Pieces of government paper, administered by government workers, is the only thing keeping the wealthy infants from destitution.

Yet, wielding those magical pieces of paper, the wealthy infant will grow up to criticize and punish, and exploit the poor infant. The infant born wealthy will be a proud Republican, and claim that he earned his wealth.

Posted by AdamSmith | Report as abusive

I could never understand why Reuters leaves the first comment on the top forever instead of circulating everyone’s comment through the position. Please reverse the chrono order!

Posted by pmagellan | Report as abusive

Really? The Republicans never said we should do away with government completely just make it smaller and more efficient. Based on your comments and beliefs your Liberal unrealistic brainwashed mind is showing. Let’s remember why American was created in the first place….to escape an oppressive out of control government.

Posted by Crash866 | Report as abusive

pmagellan, it’s easier to find stuff. Go to Fox News and see how you like its comment streams. Content aside, I bet you don’t like that system at all.

Posted by PCScipio | Report as abusive

Hey Adam, Why does it have to be government workers recording the deeds? You think if they all went home that private companies couldn’t do the job? And probably a better job too.

Posted by NewsLady | Report as abusive

Because AdamSmith is brainwashed and eats up!!!

Posted by Crash866 | Report as abusive

@AdamSmith Awesome post!

The shortsighted ideology of republicans, and their lack of care for citizens has no limits.

We are a modern democracy, so we need citizens to be educated and healthy enough to participate in the democratic process. Yet, republicans cynicism and greed won’t allow them to participate in creating a better society. Instead they believe in the worst of worlds, and appeared dedicated to ensuring not hope but continuing fear and scarcity for any have-nots.

Posted by pmagellan | Report as abusive

“pmagellan, it’s easier to find stuff.”

Really? I think to the contrary. Its always a list and the later the comments the further you have to scroll to see them.

“Go to Fox News and see how you like its comment streams. Content aside, I bet you don’t like that system at all.”

FauxNews? — I don’t trust their content.

Posted by pmagellan | Report as abusive

There are two immutables in American politics: Republicans are never on the side of the poor and working class, and Democrats are never (rarely, if you count FDR) effective in implementing their programs.

Posted by PCScipio | Report as abusive

[…] In the 2012 election, Obama will champion intervening in the economy to get Americans back to work, while his Republican rival will demand a shrunken government and the speedy repayment of the national debt.  ary […]

Posted by U.S. men in Iran to be freed soon with Talaban help: Iraqi envoy – Top news – Financial news | Report as abusive

“Democrats are never (rarely, if you count FDR) effective in ‘implementing’ their programs.”

I think you mean ‘defending’ their programs from public ignorance and eternal right wing attacks based on public lack of education.

Well, FDR, did more for these country then all republicans put together since then. I also remember the Apollo program — probably the greatest program ever, after all those in the great depression and WWII.

Republicans build bridges to nowhere, destroyed our economy by lying to take us into a war while providing tax cuts and defunding government, and wouldn’t even catch Bin Laden!

Republicans, who create little and abuse a lot, are, as the terrorist who attacked us, fundamentalists who create fantasies, such as the now debunked trickle down econ theory, in order to defeat clarity, logic and reason.

Imagine where our seniors would be if we had privatized the social security program as republicans wanted — before the financial crisis their lack of updated regulation created; and soon again.

Posted by pmagellan | Report as abusive

pmagellan, right you are! I was upgrading “never” to “rarely” in the light of FDR’s successes. cheers

Posted by PCScipio | Report as abusive

The journalists seem to want to assume that government is the only entity that can do anything – In reality, the only things that Government has done to improve our quality of life are those things that have made us more productive.

The highway systems have allowed the private sector to deliver goods and services faster and more efficiently. They created more competition and lower costs as the railroads no longer controlled interstate commerce.

Likewise, air travel up-ended the trucking industry and the unions hold over prices for transporting goods by truck.

The defense department (DARPA) created the internet, but it wasn’t until that became available to the private sector that, once again, individuals put their ideas into practice, created something of value and became more productive.

On the other end of the spectrum, we have the Department of Education, which has done nothing to improve the education of our society. Test scores, and aptitudes have been on the decline as resources have been re-distributed to the inner cities.

If there’s anyone who can say that our quality of life has improved since the fifties and the inception of the modern “welfare” system – I say, you’re wrong.

We used to be able to live well in a single-income household. Many of the people in college today wouldn’t even know what that means as they’ve been raised in a two-income household, raised by the government-controlled child care centers, public school systems and colleges who rely on Government to teach them that there is only one institution that can take care of everything they need and now it’s so ingrained that they have no experience of anything to the contrary they can point to and say – big Government destroys individual liberty and the knowledge that, if allowed to use their own resources everyone will do what is necessary to improve their own life.

If you don’t expect to walk down the street and ask your neighbors to contribute to your next trip to the grocery store, why would you expect the government to take it from your neighbors and give it to you?

Posted by Obdurate | Report as abusive

[…] In the 2012 election, Obama will champion intervening in the economy to get Americans back to work, while his Republican rival will demand a shrunken government and the speedy repayment of the national debt.  ary […]

Posted by Job market, factory data show weakness – Top news – Financial news | Report as abusive

Uh Adam Smith, with those pieces of paper at best that “rich” baby would grow up to be a Rockefeller Republican but most likely that “rich” baby would grow up to be a Liberal Democrat Senator.
Those pieces of paper represent assets. Taxes are never paid on assets, only on income, so that rich baby couldn’t care less about the income taxes because they don’t pay any anyway.
There is a HUGE difference between “the wealthy” and “high income earners”. The wealthy have already accumulated their wealth so they couldn’t care less about the taxes on income earners.
I take that back. Being liberal Democrats, they do care about taxes on income earners, because they do not want any of the income earners to accumulate enough income to become rich, so they advocate high taxes on income earners in order to stymie the efforts of income earners of becoming rich and joining their exclusive club.

Posted by beachkrp | Report as abusive

If you guys want to see hilarious business cycles, mega booms and busts, with 5% inflation one year followed by 8% deflation the next, then yeah, by all means, do away w the Federal Reserve.

I am not saying it isn’t in need of fixing, I’m not saying it’s ownership isn’t a little fishy, but it’s just ridiculous how the cadre of Fed haters on this board and others like to completely negate the fact that by smoothing cycles and producing a period of predictable inflation, we’ve been able to grow the America we know and love.

That said, great article. Keep up the good work!

Posted by Adam_S | Report as abusive

Here we go again with the “christian right rhetoric. I will go with the “christian right” any time over the “godless left”. A republican, Abraham Lincoln freed the slaves. It was democrats on the court house steps in the south trying to stop integration in 1964. It was democrats who got us mired in Viet Nam, and a republican who got us out. When Mr. Bush was president I had high hopes that my college graduate children would be able to get a commensurate job, and I had over twice the money in my 401 K than I do now. I was close to being able to retire with or without the Ponzi Social Security scam that a democrat set up. After the democrats took both houses of congress in 2006 and Mr. Obama got elected in 2008, things went over a cllif, and I very probably will need that government check, another number in huddled masses of govt dependants, just what the democrats and Keynes are all about. No one wants the govt to dissapear, just to get more efficient and to get the hell out of our lives.

Posted by zotdoc | Report as abusive

Whoa folks. I think we are getting at the extremes of each side of this issue. We NEED government. We need government by honest and reasonable people. We need government to protect our families, provide economic services, ie banking and saving our hard-earned money. If we lose our belief in the American way, we lose everything. Let’s let reason and love of our fellow man rule our nation. Law is for our protection… when properly enforced. We apparently have a government today that has forgotten what got us here as free Americans with all the liberties and freedoms that most countries envy. Let’s turn our eyes and hearts to God (sorry about that,I’m a Christian)and vote for true Americans with American ideals. Let’s quit throwing stones at each other and work out our differences in peace and goodwill. The most outspoken Republican is an American. The loudest liberal Democrat is an American. Let’s remember that.

Posted by nates1581 | Report as abusive

[…] Tea Party has morphed culture wars into economic combat […]

Posted by Perry says Romney not stark enough contrast to Obama « COWBOYRON NEWS | Report as abusive

[…] CNN Poll: GOP divided over tea party movementCNN (blog)Poll: GOP split on Tea PartyThe Hill (blog)Tea Party has morphed culture wars into economic combatReuters Blogs (blog)Fox News (blog) -Washington Post -Yahoo! News Blogs (blog)all 5,477 […]

Posted by LGBT issues again absent from GOP Tea Party debate – Dallas Voice | Politics 247 | Report as abusive

One party is asking what their government can do for them and the other believes asking not what your government caan do for you, but what you can do for your government! (JFK by the way-he’d be a Tea Party leader in todays world!

Posted by DrJJJJ | Report as abusive