Tea Party has morphed culture wars into economic combat

By Nicholas Wapshott
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.

23 comments

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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

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