David Frum Has A Lot Of Integrity

He explains why he doesn’t want to do point/counterpoint Marketplace segments against Robert Reich anymore: “although I consider myself a conservative and a Republican, and I think that the right-hand side of the spectrum has the better answers for the long-term growth of economy — low taxes, restrained government, less regulation — it’s pretty clear that facing the immediate crisis — very intense crisis — I’m just not representing the view of most people who call themselves Republicans and conservatives these days.”

I think sometimes about an alternate history scenario in which somehow the McCain campaign uncovers the mythical “whitey tape” in October of 2008 and wins the election despite the unpopularity of the GOP. You could imagine McCain and Ben Bernanke pursuing a short-term stabilization policy of low interest rates and massive payroll tax cuts, paired with a longer-term agenda of aggressive militarism and entitlement rollbacks. Liberals would naturally have genuine concern that the short-term payroll tax cuts would feed into the longer-term agenda of gutting the welfare state. There would be temptation, under the circumstances, to try to adopt the view that temporary payroll tax cuts aren’t “really” an effective counter-cyclical policy and that McCain was merely failing to address the deep structural problems in the economy. Even monetary easing would come under a cloud of suspicion as it became desirable to believe that only wholesale root-and-branch rejection of McCainism could possibly restore the economy.

And yet the reality is, as Frum says, that short-term stabilization policy is both extremely important and also basically independent of the issue of whether in the long run a low-tax low-service equilibrium is better than a high-tax high-service one.