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yacht consumption dropped by 70%, with devastating effects on the yacht-building industry, and had to be swiftly repealed.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.