Can the Democrats Own Prosperity?

And can they exorcise the ghost of Jimmy Carter?

(Page 2 of 2)

Various bits and pieces are in circulation. Fix health care. Improve income security. Restrict trade. Raise taxes on the rich. Democrats hope to speak to middle-class America's feelings of economic vulnerability, which is probably the right tree to bark up. But while some Democrats strike notes of class resentment, others seem to blame foreigners. No candidate has found a package and a tone that tell a story not primarily about populism or nationalism but about prosperity: raising the tide to lift all boats.

A prosperity narrative does not need to be conceptually elegant. It merely needs to be more right than wrong economically and in touch with the times politically, as Keynesianism and Reaganism were. What became known as Reaganomics was in fact a messy pastiche of Republican remedies old (tight money, fiscal restraint) and new (tax cuts, entrepreneurship) that Reagan assembled over the course of his 1980 campaign. The pieces hung together only inasmuch as they suited the candidate and his time—but that was what counted.

It may be that the Democrats will not find a prosperity story next year. Still, the potential for climate change is there. As Reagan exorcised Hoover's ghost, so the way appears open for the Democrats to exorcise Jimmy Carter's—and to haunt Republicans with the shade of George W. Bush.

© Copyright 2007 National Journal

Jonathan Rauch is a senior writer and columnist for National Journal and a frequent contributor to Reason. The article was originally published by National Journal.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    Probably doesn't help the Republicans that they've been spending like Paris Hilton on crack for the past eight years, either.

  • ||

    "Reagan's narrative was supply-side: He would reignite stagnating productivity by reducing tax rates, deregulating, and shrinking a bloated public sector."

    That may have been his narrative, but his actions belied it. Both Reagan and his imitator George W. Bush jumpstarted economic growth the old-fashioned way, through massive deficit spending. Reagan cut a few domestic programs--only those helping at the bottom of the economic ladder, of course--while giving enormous increases to defense. Bush, more even handed, increased spending all around. The real "secret" of supply-side economics, as sold by Jack Kemp, Reagan, and now Bush, is that deficits don't matter, so that Republicans can say "yes" as often as Democrats. So far, the deficits haven't caught up with us. And why fix the roof when the sun is shining?

  • ||

    Not the either party can really claim to be the party of prosperity, I suppose, but why has the claim to this title "fallen" from the Republicans?

    The economy has had a heck of nice run under Bush, really. You couldn't tell from listening to the news, of course, but fundamentals have been quite healthy since the recovery from the 9/11 shock.

  • BakedPenguin||

    Both Reagan and his imitator George W. Bush jumpstarted economic growth the old-fashioned way, through massive deficit spending.

    Keynesianism has become the "conventional wisdom". Beautiful.

  • ||

    The only way I can look at this is a positive light is that I hope the following scenario takes place.

    Bush continues to spend...
    Next Prez spends...
    Government falls into massive debt...
    Following Prez forced to sell off large amounts of government land when debts come due...
    ?????????...
    Profit!

  • ||

    R C Dean,

    I guess it depends which fundamentals you are talking about.

    The budget and trade deficits are massive and growing.

    The money supply is growing at about 14% per year, which is truly catastrophic. It is the inflation of the money supply that has inflated the real estate and asset bubbles. All of this is coming home to roost as we speak. Savers have been decapitated by negative real returns on their savings, which has led to a negative US savings rate. The government has phonied up the numbers regarding inflation and job growth.

  • ||

    The government has phonied up the numbers regarding inflation and job growth.

    Don't forget that they changed the methodology for calculating unemployment, too.

    And this whole time, you thought we were stable at 4.5-5% unemployment, with no major change, for 6 years?

    Ha!

  • ||

    Taktix,

    After watching the government lie about inflation, I don't trust any of their published statistics. If you dig in to the methodology behind the numbers, you come away realizing that the numbers say whatever is handy for the government.

    By the way, I don't blame Bush for this, or absolve him. He is part of it, but the whole elected government really ought to be tossed out on their ears. They won't be, of course.

  • ||

    BTW, it looks like another massacre day is brewing for Wall street, courtesy of the "credit crisis", which is a direct result of the inflation in the money supply.

    Oh, and congratulations to Ron Bailey (I think) who so presciently predicted that $40.00 oil was imminent just a few months ago. Good call, Ron. We might see $70.00 oil again (momentarily), but $100 oil is a lead-pipe cinch, and soon.

  • edna||

    split government is clearly the party of prosperity. look at the record. vote schizo in '08!

  • ||

    We might see $70.00 oil again (momentarily), but $100 oil is a lead-pipe cinch, and soon.

    Necessity is the mother of invention.

    - Plato

  • Robert||

    If the money supply is inflating so fast, where's it going? I think they're pumping up a leaky balloon.

  • ||

    Boy, I'm so glad Jonathan Rauch gets his work reproduced here. I was confused in thinking that what would be best for this country would be a party promoting far-out ideas like free markets and free minds, but what we really need is for the Democrats to tell us how they are better at managing the economy than the Republicans. Thanks, Mr. Rauch.

  • ||

    "If the money supply is inflating so fast, where's it going? I think they're pumping up a leaky balloon."

    It is going to the production arm of the US, China, India, Japan, Germany. They recycle most of it back to the US to buy Treasury bonds, which depresses the interest rate paid on the Tbonds. This creates "cheap" money, which inflates assets (stocks, real estate, etc).

    This cycle is ending as we speak, I think.

  • ||

    you guys need to post on this thread more often, and more quickly. This subject interests me.

  • ||

    The Reason staff seems to have sold their souls to high taxes. It is interesting how an alleged Libertarian magazine could think a party that makes no secret about its desire to tax the most productive members of society could "take the mantle of prosperity". At best this article is a typical no substance horse race kind of story you can get from any media outlet, the "here is how one side can win" kind of story that says nothing about which side should win, and at worst it is an implicit endorsement of taxing the rich.

    Why is it Reason, in their new found love of the Democratic Party, has completely lost the freedom aspect of taxation? The government taxing you is the most directly coercive attack on your freedom that it does, short of arresting you. The government is taking money that rightly belongs to its citizens. Yes some of that is necessary because we do need a government. But there is a real moral issue to it. Until the government can justify every dime that it is spending now, it has no right to raise taxes one dime. Instead of taking the pro-freedom view, Reason seems to look at the budget deficit and debt and conclude that the obvious answer is for the government to steal more of the people's money to make up the short fall. That is just sad for a magazine that purports to be "libertarian".

    I really think the Reason foundation, if it is to be effective, needs to move out of Washington and LA and out to like Topeka or Wyoming or somewhere. Take the whole lot of them and get them the hell off of the coast and away from the lefty friends where they can start to think clearly again. If you pay attention to the magazine, it has over the last seven years or so become more and more liberal conventional wisdom and less and less subversive and less and less pro freedom. To Reason freedom only means the drug war and worrying about the CIA listening to their phone conversations. Yeah, that is part of it but there is a lot more to it than that. Too bad they don't realize that anymore.

  • ||

    Drink! Drink! Drink1!!!1!

  • ||

    What this country really needs is a Weimar Democrat in the White House, apparently.

  • ||

    4 Drinks right?
    3 variations of "for a magazine called reason" or "for a supposedly libertarian magazine"

    and 1 drink for a variation of "you guys are just shills for the democrat/ or republicans"

    John,
    As a veteran of this forum, it is polite to preclude a drinking offense with a warning or an apology or something. I think that is the proper etiquette.

  • ||

    kwais,

    Actually I think there was a variation of the Virginal Postrel offense in there as well.

  • ||

    Kwais,

    Forgive me for not knowing what the hell you are talking about. The bottom-line is the Reason staff needs to be incessantly reminded what freedom really means. They rarely post about gun rights or low taxes and their idea of being concerned about limited government is occasionally giving Ron Paul a tongue bath and accusing Republicans of spending too much. They rarely have much to say about affirmative action or equal protection identity politics issues. They do okay on nanny state kind of stuff. I wouldn't call them shills for either party as much as being intellectually lazy and too eager to fall into mainstream media conventional wisdom.

    I am serious about moving the lot of them to Topeka or somewhere. If they are not around the conventional wisdom they are less likely to fall into it. Further, I think to work there you should have to own a gun and a conceal and carry permit. I find that gun ownership is not always but often is to be the best test of whether someone really is pro freedom or not.

  • ||

    Also, since when it is a drinking offense to kick around Reason when they do stupid things like write articles that praise high taxes as the way to prosperity? Is this a magazine or a cult? If I want to know the virtues of high taxes and how the Democrats are going to steal more of my money to bring me prosperity, I will read Slate or listen to Joe.

    I thought Reason was supposed to be an alternative to all of that. My mistake I guess.

  • ||

    The great irony of the article's title is that real median income for individual working Americans peaked in 1978 during the presidency of .... Jimmy Carter. Sorry to intrude on the narritive.

  • Episiarch||

    John has a point.

  • R C Dean||

    Also, since when it is a drinking offense to kick around Reason when they do stupid things like write articles that praise high taxes as the way to prosperity?

    Its not so much content as form that constitutes a drinking offense.

    The great irony of the article's title is that real median income for individual working Americans peaked in 1978 during the presidency of .... Jimmy Carter.

    Sigh. Only if you don't include things like benefits and the intangible increase in purchasing power driven by technology.

    One of the reasons employers are constrained in raising wages is because the cost of health insurance eats up a big chunk of their global compensation budget.

  • VM||

    Fun site that's sorta relevant: make your own tax policy

  • ed||

    When Reason moved its offices to DC many worried that its independence would be slowly digested in the belly of the beast. When Nick took over the mag his editorial promised more pop culture stories, less policy. With the addition of H&R this seems to have come to fruition. Not that there isn't something worthy to be found here daily. But I would agree with John that as a whole, the enterprise has gotten less serious and more pessimistic in its outlook.

  • ||

    "Sigh. Only if you don't include things like benefits and the intangible increase in purchasing power driven by technology."

    Very true. My sibblings make less money, accounting for inflation, than my father did. Yet, my nieces and nephews seem to have a much better standard of living than we did growing up. The idea of having two or three color TVS, a car phone and taking a yearly vacation to somewhere far away like Florida was pretty much out of question when I was growing up. We were not poor by any means things were just expensive back then.

    "When Nick took over the mag his editorial promised more pop culture stories, less policy. "

    I don't mind the culture stuff. I wouldn't bash Nick for that. But I think the policy stuff has suffered. This article is a good example of that. It is just a horserace article. You can get that anywhere.

  • Sgt Hulka||

    H&R:The Reason Foundation::
    The Daily Show::Viacom

    Jesus, lighten up Francis('es)

  • ||

    I thought it was net income that "prosperity" was based on, not taxes.

  • ||

    Just why is hard to say.

    It's only "hard to say" for people who deliberately blind themselves to the rather obvious fact that aggregate GDP numbers don't tell the whole story.

    When your health insurance costs rise faster than your salary without your health care improving, you're worse off economically - even if you want to count the rising cost of exactly the same health insurance as an increase in total compensation.

    When your salary isn't rising, it doesn't matter how much top 1% wealth increases boost the overall numbers - you're not doing any better.

    Conservative economic policies fail utterly to account for either of these factors, and that's why people don't trust them to bring prosperity.

  • ||

    Wow, the conservatarians on this thread are shooting more messengers than Uday Hussein.

  • ||

    Just let Joe have a large share of your money. He is just the messanger afterall. Him and the good folks at the Reason foundation will know what to do with it better than you. Get out your wallet and move along here. Nothing to see here.

  • ||

    Waah waah waah.

    BTW, it's really obvious you didn't read the article.

  • ||

    If only the American people were as smart as you, John.

    This is why democracy doesn't work, right?

  • ||

    "When your salary isn't rising, it doesn't matter how much top 1% wealth increases boost the overall numbers - you're not doing any better."

    So the solution Joe is for the government to steal the money from the top 1% and give it to you? That is really what is going on here isn't it? You don't like the results of the market so therefore, you take money from people who have done well and give it to people who haven't. Now of course who gets the money is usually determined by who can give the most money to someone like John Murtha, but we will ignore that for a minute. That is really the core of your philosophy isn't it? That whenever someone does well, the government should take a large and increasing percentage of what they have and give it to everyone else? I wasn't aware that was what Libertarians were selling but I guess I am out of touch.

  • ||

    There you have it, folks.

    When wealth becomes increasingly concentrated, it's "the functioning of the market."

    You can tell it's the functioning of the market BECAUSE it produces greater inequallity.

    Yes, John, because you believe this, you are deeply, deeply out of touch - not just with the values of the majority of Americans, but with the reality of how our economy functions.

  • VM||

    Measuring Worth is another fun site.

  • ||

    "The Democrats' postwar narrative was Keynesianism...."

    And George W Peron has overseen a fabulous Keynseian expansion of government spending; ought we to assume Mr Rauch is thinking: "Right policies, wrong President?"

  • thoreau||

    I don't know what the Democrats should run as, but I'm still baffled by how Republicans have run.

    2000: Things have never been better. Vote for change!

    2004 : Things have never been worse. Stay the course!

    WTF?

  • ||

    Noticing that the Democrats economic message is more popular than the Republicans is not an endorsement of their policies.

    It shouldn't be necessary to point this out, but I guess it is.

  • Gilbert Martin||

    Any poll question that asks which party is more trusted to create prosperity is actually a reflection of the economic ignorance of both the pollers and the responders.

    Political parties in particular and governments in general never created the economy in the first place. And they certainly have never engineered a "prosperous" one.

    The private sector creates the economy and it is the private sector that enables government to exist at all in the first place and not the other way around.

    The very first dollar that government ever spent on anything came from a tax on wealth that had already been created by the private sector. The same is true for the last dollar government has spent and every single one in between.

  • ||

    Huh?

    I really don't see democrats asking "Are you better of today then you were 4 years ago" and it catching many takers.

  • ||

    2000: Things have never been better. Vote for change!

    2004 : Things have never been worse. Stay the course!


    Economy was heading to recession in 2000 and in 2004 it had recovered.

  • ||

    Its about the currency, stupid. The boom in stock prices was fueled by inflationary subsidies to the markets (cash injections is what they usually call it).

    Blue collar people who save their money in cash saw their savings slowly dwindle while the top third ran away with the stocks. In terms of the well being of the middle class, all the tax cuts in the world cannot cover up failed monetary policy.

  • thoreau||

    joshua-

    Fair enough, the economy was headed to recession in 2000. But that wasn't apparent to a lot of voters.

    In 2004, the message was "Your lives are in mortal peril! Stay the course!" Do you see the problem with that?

  • ||

    Doesn't "headed for recession" mean "at the high point in the busines cycle" - i.e., "very good economic conditions that have persisted for a long time?"

    Because all the indicators were still pointing north in 2000. In the Spring of 2001, Bush was still selling his tax cut on the grounds of the overheated, strong economy providing a huge surplus.

  • JBinMO||

    As far as ballanced budgets go, part of being free and remaining that way is being responsible. I would prefer to see a much smaller government, but the long term prospertity of the US is dependant on getting the national debt under control.

  • ||

    I don't know what the Democrats should run as, but I'm still baffled by how Republicans have run.

    2000: Things have never been better. Vote for change!

    2004 : Things have never been worse. Stay the course!

    WTF?



    Easy: Al Gore and John Kerry

  • ||

    "Easy: Al Gore and John Kerry"

    Fair enough...but W? Twice? C'mon....

  • R C Dean||

    Doesn't "headed for recession" mean "at the high point in the busines cycle" - i.e., "very good economic conditions that have persisted for a long time?"

    So, joe, would you say we are headed for a recession right now? ;-)

  • Paul||

    Can the Democrats Own Prosperity?

    Democrats don't believe in private ownership of prosperity.

  • Paul||

    Alan V:

    You've way oversimplified Reagan's economic policies to help to fit them into a keynsian model. Reagan cut the marginal tax rate dramatically. Yes, the marginal tax rate had a lot of room to be cut, unlike the cuts that GWB has taken.

  • Paul||

    This cycle is ending as we speak, I think.

    Wayne, let me help you with your economic speak. You're almost there. Allow me:

    The cycle is ending, we believe, unless it's not.

    Work on that, and you'll be a real "short term outlook" economist.

  • ||

    RC Dean,

    I don't know. We used to be on an upswing, as the real economy recovered from the 2001 recession, but the fallout from this sub-prime mortgage imposion, which is even more widespread because of the mortgages being sold off as derivitives which got trades, threatens to send us into a recession.

  • ||

    RC,

    I guess, in a sense, that puts us at the top of the economic cycle right now. ;-)

  • ||

    "Yes, John, because you believe this, you are deeply, deeply out of touch - not just with the values of the majority of Americans, but with the reality of how our economy functions."


    Yeah so the values of America are the politics of envy and taking from those who are most productive? Perhaps where you live Joe but you establish pretty much every day that you don't get out much or have any idea how anyone outside of yourself actually thinks.

    More importantly, just what the hell are your values? Why is it that 18% of every dollar produced in this country is not enough to run a federal government? In addition, why is it that we cannot achieve "prosperity" by taking only 40% of every dollar in this country (if you count state and local taxes)? What is going to be the proper amount of taxes to achieve prosperity? 60% 80% 100%? The US economy and those modeled on it continually outperform central planed higher tax economies. We had your style of government in the 1970s, through high tax; high regulation policies and we got 10 years of stagflation to show for it.

    I put this issue in moral terms because for you it is obviously a moral issue. You wouldn't throw around bullshit terms like "values of the American people" if it wasn't. Whether it be on here or on the other thread talking about how Americans buy what they are told to, you hate the idea of someone being successful without your's or the government's help. You either believe in freedom or you don't. The most basic freedom any of us have is the right to make an honest living and enjoy the fruits of that living. Taxes are a basic but necessary affront to that freedom. They may be necessary but they are still an affront. Your undying belief in that government has an absolute right to whatever portion of its citizen's income it deems necessary to ensure "prosperity" makes you anti-freedom. Put simply, you cannot be a liberal in the classical sense much less a libertarian if you believe in high taxes. If you believe in high taxes you are just a socialist trying to hide your stripes.

  • ||

    Yawn. Labels are a poor substitute for thought, John.

    Just keep telling the majority of America how stupid and lazy they are. That's a great way to keep your ideas from sinking further into the swamp.

  • ||

    I can't for the life of me figure out what John and joe are arguing about, or that John is trying to argue to joe.

    John, life is short, much too short to spend arguing with people who are fine with aggressing against you. Bashing your head against the Wall Of Joe is irrational.

  • ||

    LANGUAGE is a poor substitute for thought, John.

    That's more like it, eh joe?

  • ||

    John, Nasikabatrachus is right.
    Joe is a pragmatist masquerading as a principled thinker.
    He's sort of like Dan T. without the skirt.
    Don't bother with him. The fucking prick was a government planner not long ago. That should tell you enough about his lust for control and power.

  • ||

    This poll shows the massive danger of Populism and Pure Democracy that the founding fathers tried so hard to avoid.

    Low Voter Turnout is a GOOD THING. More of it would keeps the Statists from taking over.

  • ||

    Jamie Kelly,

    I don't think you got my point. My point was to get us to not waste our lives arguing with evil people in clearly unenjoyable debates. I say that I don't think you got my point because your caustic comment seems as much directed at joe, if not more so, than towards John.

  • ||

    if not more so, than towards John.

    Should have said "as it is towards John".

  • ||

    "You shouldn't argue with people whose politics are different than yours" is surely the signo of an honest and confident thinker.

  • ||

    "You shouldn't argue with people whose politics are different than yours" is surely the signo of an honest and confident thinker.

    No, it's about not wasting your time on evil people.

    For example:

  • ||

    It's a lot easier to tell yourself that everyone who disagrees with you is evil if you go out of your way to make sure you don't learn anything about them and their ideas.

    Like a said, not what a confidence thinker does.

    Coward. I'll go toe to toe with anyone, because I have the courage of my convictions, and I'm not afraid to broaden my understanding and learn from others.

    Is it hard to pat yourself on the back while sicking your fingers in your ears?

  • ||

    I've argued with you several times, joe, and you've already shown that you think it's okay to attack people.

    Unless you'd like to tell me how some humans have rights that other humans don't have, I'm just fine with leaving you be--I don't owe you a damn thing.

  • ||

    Attack people - you mean like calling them evil for disagreeing with you about politics?

  • ||

    Like kidnapping people if they don't find your method of helping the poor agreeable enough to surrender their property.

  • Robert||

    "If the money supply is inflating so fast, where's it going? I think they're pumping up a leaky balloon."

    It is going to the production arm of the US, China, India, Japan, Germany. They recycle most of it back to the US to buy Treasury bonds, which depresses the interest rate paid on the Tbonds.


    Why doesn't the increased demand for the bonds bid their rates up rather than down? We know it bids up their price, so why wouldn't the issuer capture some of that by raising rates?

    As to gun ownership's being a test of freedom loving, would making fireworks count as an acceptable alternative?

  • Mike Reason||

    What is wrong with Reason and the rest of the Libertarians is that they think they are engaging in clever political maneuvering by siding with the socialist Democrat party. ("Ooh, we're so real politic.") It would be better if you did like us libertarian Republicans and work as part of a coaliton of like-minded groups to achieve goals we can all agree on.

  • Gilbert Martin||

    "Because all the indicators were still pointing north in 2000"

    No they weren't.

    The stock market downturn began in March 2000.

  • ||

    "What is wrong with Reason and the rest of the Libertarians is that they think they are engaging in clever political maneuvering by siding with the socialist Democrat party."

    Not true. Many of us are merely stating our preference for a portion of the Democratic platform, usually the social issues. Of course, since the Democrats have fallen in bed with the GOP on many privacy issues this relationship is strained from the outset. But the more theocratic, big spending and anti-privacy the GOP becomes, the less motivation there is to support them.

  • ||

    I simply don't see why corporations should have any say in politics. I would love to hear the rationale for this.

  • ||

    I simply don't see why unions should have any say in politics. I would love to hear the rationale for this.

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