Baseball Crank
Covering the Front and Back Pages of the Newspaper
May 14, 2003
POLITICS: Conservative Truths . . .

Well, looks like the kickoff of my "Conservative Truths" series really knocked over the beehive, attracting a bunch of comments here and over at CalPundit's site, and we had by far our biggest traffic day ever on Monday (391 unique visitors), which had to be the result of the link from Kevin Drum (although we'd set records on Thursday and again on Friday, in part due to a link from Steven Den Beste).

The buzz is a good thing; the long-term goal here is to build a framework for making sense of political arguments. (Some people weren't happy with the level of generality in my observation about incentives, but the idea here is mostly to work on a general level and refer specific posts back to the theory).

If I made one mistake, it was picking the dividend tax cut, which is intensely controversial and on some level unpredictable in its effects, as the prime example; a more obvious example is simply the Congressional Budget Office scoring system, under which you traditionally assume that there will be no changes in behavior resulting from a tax cut and no economic growth flowing therefrom; the Democrats must be quite aware that these projections are bogus, and yet they and their friends in the media have tended to treat these numbers as gospel truth. And, of course, the entire Great Society welfare system was constructed essentially without regard for how the system would change incentives to work and to keep families together; the failure to account for the incentive effect of such programs was the Achilles heel of the entire initiative.

Another famous example was the luxury tax imposed during the Bush I years; the Democrats argued that they could soak the rich buyers of yachts, but instead, yacht consumption dropped by 70%, with devastating effects on the yacht-building industry, and had to be swiftly repealed. (Granted, The American Prospect argued that the tax still brought in several times more revenue than projected, but that didn't do the guys at the dock much good). The refusal of Democratic policy-makers to consider incentive effects in the way they develop and promote their initiatives remains one of the critical dividing lines between the two major parties.

Posted by Baseball Crank at 6:47 AM | Politics 2002-03 | Comments (2) | TrackBack (0)

Both parties posture. Most politicians in both parties spend most of their time posturing. So arguing about the accuracy of CBO or some other budget forecasting group is kind of silly, because most quotes you can find are just posturing.

But if you want to take a look at incentives, let's start with that tried-and-true favorite of the republican party: ag. policy. Which party in recent memory passed a farm bill which actually brought market incentives to farming? democrats. which party when it came to power shoveled a ton of cash at farmers? republicans.

when we're done with ag. policy, we can look at the incentives created with our foreign trade policy. Pakistan has the incentive to tell us to fuck ourselves (textiles) as does Africa (ag again) as does Russia and Canada (iron or steel, can't remember.) etc.

Tax enforcement policy? The current administration is shifting major efforts from rich to poor. Incentive if you're wealthy enough for tax planning? get more aggressive.

So, referring back to your post, if the goal is to "build a framework" about politics, then you need to be a lot more forthcoming about the impact of the incentive argument against the republican party. but if you just want to bash democrats, i can find that elsewhere, thanks so much.

Posted by: FDL at May 18, 2003 4:27 AM

You won't find me defending pork-barrel spending on farm bills or protectionist policies on steel, textiles, etc. Those aren't conservative policies, although unfortunately the GOP hasn't been innocent of them.

Posted by: The Crank at May 18, 2003 10:09 PM
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