Something I’ve noted with interest as we switched from the George W Bush administration to the Obama administration is that often surprisingly little in terms of policy analysis separates the “supporters” of a policy from a the “opponents” of it. When policymakers move to address a problem, they normally do succeed at coming up with something that would improve the situation they’re seeking to address at least a little. And yet the actual political process invariably turns up something less optimal than what you’d draw up around the seminar table. Consequently, two people with very similar views of whatever the issue at hand is can always manage to come up with divergent blog posts / columns / sound bites / whatever simply by choosing to emphasize the positive or the negative.
The result is to create a kind of exaggerated view of how much polarization there is about policy issues. Many people are strongly committed to the view that the United States both could and should bear a level of taxation more similar to what you see in Europe, whereas others are strongly committed to the view that democratic countries pathologically overtax their wealthiest citizens and this trend should be resisted with all possible force. This is a really important disagreement among people with serious ideas about economic policy. And it naturally drives divergent views about the merits of the two political parties. But then that starts to different takes on things like ARRA, quantitative easing (where Doug Holtz-Eakin seems to be saying it’s okay for monetary policy to be too tight because we really ought to do tax reform), the Waxman-Markey climate bill, etc.
Further exacerbating the trend, formerly marginal schools of policy analysis start to gain credibility as soon as they become the only way to generate the “right” policy outcome. Throughout the 25 years before Barack Obama’s inauguration, Republican Party officeholders and conservative media figures showed very little interest in real business cycle or “Austrian” accounts of macroeconomic stabilization. But these constructs produce very strong and clear critiques of some signature Obama administration initiatives, so suddenly you hear much more about them.
The result of all this is that people who follow politics in a somewhat casual way are likely to come away with a vastly exaggerated view of the level of practical disagreement about policy among the “experts” on both “sides” and to underrated the extent to which bad outcomes represent pathological elements of the system itself.