Chapter Ten

The Republican War on Economics

There are people who literally walk across the street when they see me coming.”

Bruce Bartlett is sitting in an Irish pub in Great Falls, Virginia, explaining how he became a heretic on the U.S. political right. In the course of our conversation, what comes across most clearly is that Bartlett is the kind of person who says exactly what he thinks—which, it seems, was a large part of the problem.

“It’s absolutely amazing the uniformity of attitudes you hear from conservatives,” says Bartlett. “It’s like they use the same identical words.” Bartlett hews to no such line: When we talked he was coming off a large press blip for calling Texas governor Rick Perry an “idiot” on CNN. (The provocation was Perry’s remark that it would be “almost treasonous” for Federal Reserve chairman Ben Bernanke to launch another bout of quantitative easing prior to the 2012 election.)

You might think, based on his resume, that Bartlett would have impeccable cred in the conservative movement. Trained as a historian, but frankly an economics wonk, over his career Bartlett has worked in the Reagan White House, the George H.W. Bush Treasury department, on staff for Congressional Republicans (including Ron Paul and Jack Kemp), and on the think tank circuit—Cato Institute and Heritage Foundation. He’s seen all parts of the conservative movement. He’s kicked the tires. “For a long time, I was a very loyal Republican,” he offers.

But near the middle of George W. Bush’s first term in office, Bartlett began sensing something was very amiss. In late 2003, Bush and Congress created Medicare Part D to pay for senior citizens’ prescription drugs—and did so in a way that not only blocked the government from negotiating with pharmaceutical companies for better prices, but added considerably to federal budget deficits. “I was just absolutely flabbergasted,” says Bartlett, “because any half competent budget analyst knew Medicare was our number one budget problem.”

Working at that time for the conservative, Dallas-based National Center for Policy Analysis, Bartlett became increasingly critical of the administration. He made particularly large waves when he was quoted in The New York Times Magazine in late 2004, accusing George W. Bush of “[dispensing] with people who confront him with inconvenient facts . . . Absolute faith like that overwhelms a need for analysis.” Bartlett then exercised his own need for analysis in his bestselling 2005 book Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy, which denounced the president for terrible fiscal stewardship—for not being a good economic conservative—but carefully stayed away from criticizing Bush on social and foreign policy.

“I thought, naively, if I just wrote about only domestic policy and quoted a lot of conservatives, and wrote only stuff that no conservative could disagree with on the substance, and documented it well, then people would be forced to accept it,” Bartlett remembers.

Instead, the National Center for Policy Analysis dismissed Bartlett after seeing the manuscript. According to a report that soon emerged in The New York Times, the conservative outlet “did not want to be associated with that kind of work.” Bartlett, it seemed, had betrayed the team, the group. He had been far too individualistic, and frankly, too Open.

The transformation was complete, and now Bartlett no longer calls himself a Republican—though he still insists that, in the Burkean sense, he’s a conservative. “I think we should conserve what’s good,” he explains. But trying to conserve intellectual conservatism has been a losing battle—and like a Kerry Emanuel of economics, Bartlett has grown more and more outspoken about how off-base the right has become on fiscal and monetary policy. To read his work over the past few years is to quickly see that conservatives have become just as anti-economics as they are anti-science. And we’re not talking about debatable or nuanced matters here, like whether you’re a Keynesian or a follower of Milton Friedman, and in what context. As Bartlett explains, the right today doesn’t even follow Friedman—a onetime free market conservative icon and Reagan adviser—any longer.

“Now all the kooks have gone over to bashing the Fed, going for the gold standard,” says Bartlett. “Somehow Ben Bernanke should be strung up for even thinking about increasing the money supply. That used to be the standard conservative response, and now it’s not even allowed to be discussed.”

“Milton Friedman, if he were alive, he’d be saying, ‘you’re all nuts,’” says Bartlett.

Economics has long been the one academic discipline that conservatives feel they own. To hear a Bartlett or David Frum tell it, the period from the 1970s up through the Reagan years was a time of intellectual ferment and excitement on the right, precisely because of the introduction of new and heretical thinking in economics.

But whether conservatives can still make such a claim to the field is dubious. Even though they’re less liberal than experts in some other fields, academic economists today are liberal by nearly a 3:1 margin, according to the research of sociologists Neil Gross and Solon Simmons discussed earlier. Even if you sample the average citizen, rather than the expert class, liberals do not appear any worse at basic economic reasoning than conservatives.

For instance, in a 2009 survey that tested the public’s “economic Enlightenment” by asking 17 questions—some clearly designed to trap liberals, and some clearly designed to trap conservatives or libertarians—the two groups performed equally poorly on the specific questions that were crafted to trip them up. For instance, liberals and progressives didn’t do so hot when asked to agree or disagree that “Rent-control laws lead to housing shortages” (they do) and “Free trade leads to unemployment” (it doesn’t, overall). But conservatives and libertarians didn’t do so hot when asked to agree or disagree that “Gun-control laws fail to reduce people’s access to guns” (they don’t fail). And conservatives in particular did much worse when asked to agree or disagree that “Making abortions illegal would increase the number of black market-abortions” (it obviously would).

Less important than the flubs made in surveys, though, are the wrongheaded economic claims now fully embraced and repeated endlessly by conservative elites—elected representatives, think tank mavens, and commentators. We’re talking about assertions that are rejected by a consensus of economic experts, or that are just outright false, but that we nevertheless find conservatives wedded to and unwilling to let go of because they backstop core beliefs. These are everywhere nowadays, and they’re hugely consequential falsehoods to boot. They lie at the very center of public debate over fiscal policy and the state of our economy.

It isn’t just misinformation about taxes, deficits, and how our economy came to ail so badly—though there’s plenty of that. But we’re also talking about putting the entire U.S. economy and way of life in jeopardy on the basis of questionable economics, the way the Tea Party debt ceiling deniers did. And now they’ve begun an ill-informed attack on the one institution above all that must remain above politics in this country: The Federal Reserve.

Without saying that liberals and Democrats have never gotten anything wrong on economics, then, we can safely say this—they don’t show the same denial of reality today. Nor do extreme left-wing economic positions have any real sway at present.

“The problem with left wing economics,” says Bartlett, “is really that you never hear it.”

To show how Republicans have embraced faith-based economics, let’s start with one whopping false claim that we’ve already encountered in these pages. When it was directly refuted right before their eyes in Brendan Nyhan’s and Jason Reifler’s motivated reasoning study, conservatives were apparently so affronted that they showed a “backfire effect.”

I’m referring to the claim, straight from George W. Bush’s mouth and the mouths of many members of his administration, and many other conservatives, that tax cuts increase government revenue—or, as Bartlett puts it, “pay for themselves.” Mitch McConnell, the Senate minority leader, put it like this in 2010:

That’s been the majority Republican view for some time. That there’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy. [Italics added]

McConnell himself asserts that most Republicans believe this—and if that’s true, then it’s very strong evidence for this book’s argument. Because the claim is completely without foundation.

It’s true that tax cuts can stimulate the economy and cause growth. And this may, in turn, ultimately lead to some increase in tax revenue. But no serious economist thinks tax cuts (especially the Bush tax cuts) stimulate the economy enough to fully replace the revenue lost to the government from cutting taxes in the first place.

Indeed, according to the Center on Budget and Policy Priorities, tax cuts enacted under George W. Bush increased federal budget deficits by some $1.5 trillion between 2001 and 2007. Bush’s own Council of Economic Advisers chair N. Gregory Mankiw, the Harvard economist, has likened the idea that tax cuts increase overall revenue to that of “some snake oil salesman . . . trying to sell a miracle cure for what ails the economy.”

And this is just the first of many questionable economic claims now used to support a government-shrinking agenda, to defend conservative policies and—perhaps most important, from the perspective of supporting the in-group and denigrating the out-group—to attack liberal ones.

The notion that tax cuts pay for themselves is a linchpin of the present conservative view that tax cuts are always good, and tax raises always bad. Almost all congressional Republicans have signed a pledge, to Grover Norquist’s Americans for Tax Reform, that effectively requires them to hew to this supremely Manichean stance. This, in turn, leads to much inflexibility, and much all-or-nothing negotiating. For their pledge notwithstanding, the truth about tax cuts can never be an absolute one: It’s always situational. They’re very good in some contexts, very bad in others, and everything in between (especially since there are so many different kinds of taxes, from highway tolls to cigarette taxes to real estate taxes to the AMT).

A closely related falsehood is the notion that George W. Bush and his tax cuts are not to blame for the vast deficits we’re now laboring under. That Bush had a major hand here is obvious to anyone who analyzes the U.S. fiscal situation—yet conservatives manage to claim otherwise. Here, for instance, is Senator Orrin Hatch in April of 2011: “America has a debt crisis not because citizens are taxed too little, but because government spends too much.”

The Bush tax cuts are not, to be sure, the sole cause of our predicament—any more than Closedness, alone, explains Republicans. The economic story, too, is multifaceted and multicausal. It involves many things that occurred during the 2000s, and most of all, the Great Recession. But even setting the last factor aside, the large majority of them were on Bush’s watch. And insofar as some occurred on Obama’s—like passing the 2009 stimulus bill—that’s because he was trying to put out the fires that raged when he took office.

To show as much, consider a recent Pew Charitable Trusts analysis of our budgetary plight. Pew wanted to understand why there was such a vast difference between the Congressional Budget Office’s January 2001 projection of where we’d be right now—the CBO expected then that we’d be running a more than $2 trillion surplus—and our actual state of affairs: some $10 trillion in publicly held debt (a figure that does not include much additional debt held in government accounts). That’s a roughly $12 trillion growth in publicly held debt over a decade. What caused that huge change?

According to Pew’s analysis, the 2001 and 2003 Bush tax cuts added up to 13 percent of the total, making these tax cuts one of the largest single contributors to the growth in debt. But of course there were many other contributors, including the two wars (10 percent), Medicare Part D (2 percent), increased spending (15 percent), other tax cuts (5 percent) and increased interest costs (11 percent), the Recovery Act (6 percent), and extending the Bush tax cuts in 2010 (3 percent). The biggest single factor was “technical and economic changes” at 28 percent, which includes the recession.

The fundamental point, demonstrated eloquently by these figures, is that annual deficits—which steadily increase our national debt—by definition arise from an imbalance between spending and revenue, where the former exceeds the latter. That means they can be reduced either through cuts in spending or increases in revenue. But today’s Republicans will not countenance the latter, even though major revenue decreases (under Bush) are a key factor underlying current deficits.

To square their circle, Republicans therefore have to engage in intense motivated reasoning about taxes and deficits. Here’s how Bartlett recently explained it, in his admirably neat and factual tone:

Simple common sense tells anyone who examines the data that tax cuts are responsible for a substantial proportion of the budget deficit and the increase in debt since 2001. Therefore, it is not unreasonable for tax increases to play a role in getting the nation’s finances on a sustainable basis. The Republican position that the Bush tax cuts had nothing to do with our current fiscal crisis is incorrect.

Thus far, I’ve really only touched on economic falsehoods involving the legacy of the George W. Bush administration, and how that legacy affects where we stand today. For conservatives, these play a very important psychological role. They help to defend a Republican president (the team) and an orthodoxy—that tax cuts are always good.

But when President Obama took office, the dynamic rapidly shifted from in-group bolstering to out-group denigration. At this point, the economic falsehoods arguably became even more intense, and many new ones sprang up—because many conservatives thought pretty much everything Obama (the “socialist”) did was wrong.

Take the Tea Party response to the 2009 economic stimulus bill (technically the American Recovery and Reinvestment Act), hastily passed at the beginning of the Obama presidency to save the crashing economy from tumbling into a full blown depression. According to an early 2010 analysis by the Congressional Budget Office, the law added “between 1.0 million and 2.1 million to the number of workers employed in the United States” during the last 3 months of 2009 alone, reducing unemployment by as much as 1.1 percent.

But as the 2010 election campaign heated up, Republicans began attacking the stimulus virulently—and some even went so far as to claim it had failed outright to create jobs. The Tea Party-linked advocacy group Americans for Prosperity, as well as numerous GOP candidates and campaign ads, baldly asserted that the stimulus bill did not create jobs; that it was a “jobless stimulus,” did “nothing to reduce employment,” and so on. GOP presidential candidate Rick Perry also repeated this claim in a September 2011 primary debate, asserting that the stimulus created “zero jobs”—a claim for which he quickly drew a PolitiFact “pants on fire” rating.

The real assessment of the stimulus is far more complex and, naturally, nuanced: In a dramatic recession, many more jobs were lost than the stimulus was able to save. So even though it likely created or saved a few million jobs, the bill merely softened a very hard economic landing. There’s an extremely strong argument that a much bigger stimulus was needed; but that doesn’t make the one that passed worthless, or prove that it didn’t work. It did—just not enough.

Counterfactual attacks on the stimulus bill were just a beginning. By 2010, just one year into Obama’s term, the Tea Party had fashioned yet another big lie about the president’s economic policies—the notion that President Obama had raised their taxes.

This has been quite the tax-cutting administration. The stimulus bill, for instance, contained a variety of tax cuts that lowered rates for 98 percent of working families and individuals alike, according to Citizens for Tax Justice. The cuts came through the “Making Work Pay” tax credit, changes to the alternative minimum tax (AMT) and earned income tax credit, and other modifications.

Yet by early 2010, surveys showed that Tea Party supporters thought Obama had raised their taxes. For instance, in April of 2010, after the stimulus bill tax cuts had already taken effect, a New York Times/CBS poll found that 64 percent of Tea Partiers thought the president had increased taxes for most Americans, while only 34 percent of the general public held the same misconception. (Ninety-two percent of Tea Partiers in the same poll believed Barack Obama was moving the U.S. toward socialism.)

Meanwhile, in the real world, the tax cuts continued. At the end of 2010, President Obama and the Republican Congress agreed to extend George W. Bush’s tax cuts, preventing what would otherwise have been a tax “increase” when they expired. In this negotiation, the Obama administration also secured a payroll tax cut, lowering the amount that workers paid out for Social Security. As a consequence, concludes PolitiFact, “a majority of Americans have seen reduced taxes under President Obama.”

But if the fact checkers are getting involved, that means that demonstrably false claims are being circulated. And as usual, they’re coming from the political right, where there remains a concerted effort to depict President Obama as a tax raiser. The Heritage Foundation in particular has denounced the president on this front—based largely on a variety of provisions in his health care bill, which do indeed raise selected taxes in certain situations, for certain people. “Obamacare and New Taxes: Destroying Jobs and the Economy,” reads one of their headlines. It’s dated January 20, 2011—only about a month after the deal between the president and congressional Republicans to keep taxes low by ensuring the Bush tax cuts did not expire.

It’s certainly true that even as he has slashed income taxes, President Obama has presided over some selected tax increases that will affect certain people—increased taxes on cigarettes, for instance. The health care reform bill, too, contained targeted taxes: on indoor tanning salons, those who don’t buy health insurance (to get them to do so), and increased Medicare taxes on the wealthy. But this is surely not what most people—including Tea Party members—are thinking when they claim that Obama raised their taxes.

And then, of course, there’s the logical consequence of wrongly exonerating President Bush for current deficits—which is to say, wrongly blaming them on President Obama. To give just one example, Rep. Michele Bachmann has repeatedly displayed a chart in which two towering blue deficit column are shown for the years 2009 and 2010 (representing President Obama’s first two years in office), and a series of small red deficit columns are shown for 2002–2008 (representing Bush’s presidency). The suggestion is that in the years 2009 and 2010, deficits and debt suddenly ballooned—and this is President Obama’s fault, as it happened on his watch.

We’ve already seen where the debt actually comes from—the Bush legacy, the recession, and finally, a few moves by President Obama to extinguish fires. And we’ve seen that Obama was dealt a nearly impossible hand, both by his predecessor and the recession. Blaming him for the size of ongoing deficits or the debt is unreal.

I want to emphasize that the consequence of falsehoods like these is not small. They are at the center of national economic policy, going to the very heart of our current financial plight. And still, it gets worse.

“It’s the most monumental insanity that I can even imagine.”

As usual, Bruce Bartlett wasn’t pulling any punches. Especially not when it came to the idea that the U.S. might default on its debts—drawing a credit downgrade, alarming other countries and investors about the safety of our bonds, leading them to seek havens elsewhere for their money, and causing our borrowing costs to go up . . . and many, many other terrible things to happen.

Bartlett said these words, to Salon.com, fully half a year before the debt ceiling crisis reached its summer peak. But then, he’d been warning about precisely this disaster since long before the November 2010 election—the Tea Party election. Even then, he could already see that Republicans were going to pick up congressional seats, and the debt limit would need to be raised so the Treasury Department could continue to pay the country’s bills. And he fretted that “a growing number of conservatives have suggested that default on the debt wouldn’t be such a bad thing.” As one of them had put it: “Government spending is our economy’s unspoken ill, and the day a default leads to the starvation of this economy-retarding beast is the day the U.S. economy really starts to boom.”

To the contrary, Bartlett warned, a default would have devastating consequences that those advocating it “have absolutely no clue about.”

Bartlett was prescient. And as the crisis drew nearer and nearer, he became a chief debunker of the suddenly mainstream GOP doctrine of debt ceiling denial. I’ll survey the (bogus) arguments in a moment, but first, we need a bit more background on the debt ceiling, and the political context in which this reality-denying fight occurred.

The debt ceiling is a troublingly oddity of U.S. law. It’s a statutory limit on borrowing by the U.S. Treasury, one that has to be raised occasionally so the department can continue to pay for obligations already incurred by Congress and presidents. In other words, Congress votes to spend money, and then occasionally votes again to let the Treasury pay for what Congress has already committed to.

As Bartlett repeatedly emphasized, it is therefore deeply hypocritical for members of Congress to vote for spending bills on the one hand, and then oppose raising the debt ceiling to fund the consequences of those votes on the other. The Treasury Department would not need to break through debt ceilings unless Congresses and presidents had approved unbalanced budgets and deficit spending.

Coming off the 2010 election, Tea Party Republicans saw an opportunity in the looming debt ceiling vote. They could threaten to block a debt ceiling increase, and thereby extract grand budgetary concessions and shrink government. Some even actually seemed to want to let a default happen: It would lead to a kind of automatic budget balancing and government shrinkage, since the Treasury Department would be unable to pay out more money than it actually had.

To be sure, this scenario would have made for quite the harsh budget balancing—but then, as Bartlett puts it, “they like recessions. They think they’re a cleansing mechanism, and you need the collapse to happen as soon as possible, because as soon as you reach the bottom you can go back up again.

“It’s reasonable,” Bartlett continues, “if you think sticking a knife in your eye is a good way to deal with glaucoma.”

What came to be known as debt ceiling denial amounted to a motivated rationalization of these tactics. The first and more simple argument was that somehow a U.S. government default on its debts would be a good thing, or at least better than the alternative of continuing to have huge debts and a spendthrift government. Rep. Ron Paul, for instance, wrote that “default will be painful, but it is all but inevitable for a country as heavily indebted as the U.S.” John Tamny, the Forbes columnist, also epitomized this view, writing that this “starve the beast” approach would usher in an era of new productivity, since too much government spending was the real problem with the economy.

This position is certainly coherent—but also senseless, because of the massive pain it would inflict.

While it is impossible to predict exactly what would happen if the U.S. were to default, there was every reason to be gravely concerned. Reasonably foreseeable consequences included credit downgrades, a new recession, rising interest rates on future debt, and reverberations throughout the entire economy: more unemployment, greater costs on personal loans, including car loans and mortgages, and so on.

Much debt ceiling denialism was subtler and more insidious than this, though. The more sophisticated deniers acknowledged that it would be wrong and intolerable for the U.S. to default on its debts, but simultaneously argued that the debt ceiling didn’t really need to be raised by the date (August 2, 2011) that Treasury Secretary Timothy Geithner had given as his deadline—the last possible day before his department would be unable to pay some of its obligations.

Led by Republican Senator Pat Toomey of Pennsylvania, among others, these deniers argued that Geithner could simply pay off the government’s bond creditors first, and then prioritize subsequent payments. And it was claimed that this would not really be a “default”—bondholders would always get their money, so where was the risk?

It’s just that, well, a lot of other somebodys wouldn’t get paid under this “prioritization” scenario. Who would they be? Military contractors? Social security recipients? Medicare beneficiaries? The FBI? That was never clear, but any such choosing of winners and losers would be extremely painful and problematic. “How the Treasury will decide who gets paid and who doesn’t is a complete mystery and a problem that no conservative to my knowledge has given a second’s thought to,” wrote Bartlett of this disturbing idea.

Take just the month of August 2011. A study by the Bipartisan Policy Center estimated that the Treasury would only take in about $172.4 billion during the month, but would owe $306.7 billion. So the Center constructed a scenario in which the department used the incoming money to pay its interest on bonds and to pay for social security benefits, Medicare and Medicaid benefits, unemployment insurance, and military contractors—totaling about $172 billion. This would then necessitate not paying for the Departments of Labor, Justice, Energy, and Education; not paying for the Environmental Protection Agency; not paying federal salaries or for veterans programs; not paying for housing assistance for the poor; and much, much else.

This would have been not only unfair, but likely financially catastrophic. From Geithner’s perspective, it was just “default by another name.” Just because the debt ceiling deniers used a narrower definition of “default” does not mean that it was reasonable to subject the United States to such turmoil, or even to suggest doing so.

I wish we were finished. But we’re not.

In late 2010, the Federal Reserve, chaired by Bush appointee Ben Bernanke, announced something called QE2: a second round of “quantitative easing,” in which the national bank bought up $600 billion of its own bonds. Hence the charge from conservatives, like Texas governor Rick Perry, that the Fed was “printing money,” although technically it was not. But new money was certainly being created, injected into the system in the hope of increasing bank lending and generating further economic stimulus.

From that point on, a rumbling conservative distrust of the Federal Reserve began to build, as conservatives (rather opportunistically, in light of the fact that any economic improvement might help President Obama) denounced the idea of creating more money on the grounds that it threatens the value of existing currency. Sarah Palin, for one, opined that we “shouldn’t be playing around with inflation” and asserted that grocery store prices had gone up.

There’s certainly a risk of inflation when you create new money. But the idea that inflation is something we should focus on right now, amidst much more momentous economic hardships—and at a time when inflation is, at this writing, not raising any alarm bells—is ostrich-like.

Nevertheless, the anti-Fed cry led to an extraordinary occurrence: In September 2011, Republican leaders in Congress actually sent Bernanke a letter urging him to cease attempts at monetary stimulus—as if this is a decision that politicians, rather than expert economists, ought to be making.

The Republicans’ stated reason for pressuring the Fed was very peculiar. QE2, they said, had “likely led to more fluctuations and uncertainty in our already weak economy.” Further such actions, House Speaker Boehner and his colleagues intoned, “may erode the already weakened U.S. dollar or promote more borrowing by overleveraged consumers.”

“I’m not shocked by much anymore, but I am shocked by this: the leaders of one of the great parties in Congress calling on the Federal Reserve to tighten money in the throes of the most prolonged downturn since the Great Depression,” wrote David Frum when the GOP letter came out. Presumably Frum can still can remember the days when Milton Friedman, who would have supported monetary easing, was a GOP icon.

The claim of the GOP leadership is deeply disturbing, in that the core problem with the economy as of this writing (in early October 2011) is precisely the opposite of what Republicans say. It isn’t inflation or people getting into too much debt. It’s unemployment and lack of growth. It’s a failure to come out of the recession with the speed that had been hoped for, which is precisely why it was appropriate for the Fed to take additional action.

In sum, Republican economic unreality now extends into monetary policy, and includes rejecting the views of Milton Friedman and pressuring the Federal Reserve, always insulated from politics (until now), to take precisely the opposite actions from those that are needed as we continue to reel from the Great Recession.

As my discussion with Bruce Bartlett about the right wing’s economic follies continued—including conservatives taking positions that, just a few years earlier, conservatives denounced—something occurred to me. Bartlett was a nuanced and a situational economic thinker, rather than one who insists upon strict all-or-nothing rules or black and white approaches. And that (along with his mouth) was what got him in so much trouble with today’s conservatives.

Bartlett was explaining to me his long study of Keynesianism—the view that when an economy freezes, the government has to step in and spend to get the gears turning again. The political right today, explains Bartlett, believes that “any sort of Keynesian fiscal stimulus is not only wrong, but counterproductive.” Instead, for conservatives, it’s tax cuts, tax cuts, tax cuts, no matter the situation—a very un-nuanced application of the supply side economics of the Reagan years.

Bartlett himself was a chief proponent of supply side economics—back then. He authored the book Reaganomics in 1981. But he doesn’t think the time for Reaganomics is now, because he doesn’t think that one economic truth obtains in every economic situation. “Right at the moment when the economy collapsed, it was immediately apparent to me that the whole Keynesian idea was now exactly applicable to the circumstances of the time,” says Bartlett. “Rather than being dead, it was coming back like a Phoenix.”

“I still think the supply side model fits in other circumstances,” he adds, “but it’s certainly not applicable today. We have an excess of supply—why do we need more supply?”

When circumstances change, a flexible thinker like Bartlett can find himself on the same side as a liberal economist like Paul Krugman. Meanwhile, the rigid right keeps pushing tax cuts, and now, “don’t print money”—not so much thoughts any longer, but chants.

Notes

187 “people who literally walk across the street” Interview with Bruce Bartlett, October 3, 2011. All quotations (unless otherwise noted) are from the same interview.

188 “Absolute faith like that overwhelms a need for analysis” Ron Suskind, “Faith, Certainty, and the Presidency of George W. Bush,” New York Times Magazine, October 17, 2004. Available online at http://www.nytimes.com/2004/10/17/magazine/17BUSH.html.

188 “did not want to be associated with that kind of work” Richard W. Stevenson, “In Sign of Conservative Split, a Commentator is Dismissed,” The New York Times, October 18, 2005.

189 economists today are liberal by nearly a 3:1 margin Neil Gross and Solon Simmons, “The Social and Political Views of American Professors,” 2007 working paper.

189 “economic Enlightenment” Daniel B. Klein and Zeljka Buturovik, “Economic Enlightenment Revisited: New Results Again Find Little Relationship Between Education and Economic Enlightenment but Vitiate Prior Evidence of the Left Being Worse,” Econ Journal Watch, Vol. 8, No. 2, May 2011, pp. 157–173. Available online at http://econjwatch.org/articles/economic-enlightenment-revisited-new-results. See also Daniel B. Klein, “I Was Wrong, and So Are You,” The Atlantic, December 2011, available online at http://www.theatlantic.com/magazine/archive/2011/12/i-was-wrong-and-so-are-you/8713/#.

190 the one institution above all that must remain above politics Noam Scheiber, “Fighting the Fed,” The New Republic, November 17, 2010. Available online at http://www.tnr.com/print/article/politics/79223/fed-sarah-palin-war-quantitative-easing.

190 directly refuted right before their eyes Nyhan, Brendan and Jason Reifler. 2010. “When Corrections Fail: The Persistence of Political Misperceptions.” Political Behavior 32(2):303–330. Available online at http://www-personal.umich.edu/~bnyhan/nyhan-reifler.pdf.

190 straight from George W. Bush’s mouth For a rundown of all the times the Bush administration made this claim, see Brendan Nyhan, “Bush vs. his Economists, IV,” October 10, 2006. Available online at http://www.brendan-nyhan.com/blog/2006/10/bush_vs_his_eco.html. See also Dana Milbank, “For Bush Tax Plan, a Little Inner Dissent,” The Washington Post, February 16, 2003.

191 “That’s been the majority Republican view for some time” Quoted in Brian Beutler, “It’s Unanimous! GOP Says No to Unemployment Benefits, Yes to Tax Cuts for the Rich,” TPMDC, July 13, 2010. Available online at http://tpmdc.talkingpointsmemo.com/2010/07/its-unanimous-gop-says-pay-for-unemployment-benefits-not-tax-cuts-for-the-rich.php.

191 some $ 1.5 trillion between 2001 and 2007 Center on Budget and Policy Priorities, “Tax Cuts: Myths and Realities,” May 9, 2008. Available online at http://www.cbpp.org/cms/?fa=view&id=692.

191 “some snake oil salesman” N. Gregory Mankiw, Principles of Microeconomics, p. 29–30, “Charlatans and Cranks.” Dryden Press, Fort Worth, TX, 1998.

191 supremely Manichean stance Bruce Bartlett, “Norquist Holds the Deficit Hostage to ‘Starve the Beast’ Theory,” Tax Notes, March 21, 2011.

192 “not because citizens are taxed too little” Orrin Hatch press release, April 14, 2011. Available at http://hatch.senate.gov/public/index.cfm/releases?ID=cd997230–7bd5–45ec-a1df-18ea6fe1ee10.

192 analysis of our budgetary plight See Pew Charitable Trusts, “The Great Debt Shift,” April 2011, available online at http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Fact_Sheets/Economic_Policy/drivers_federal_debt_since_2001.pdf.

193 “Simple common sense . . .” Bruce Bartlett, “The Republican Myth on Tax Cuts and the Deficit,” Tax Notes, May 16, 2011.

193 early 2010 analysis Congressional Budget Office, “Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output From October 2009 through December 2009,” February 2010. Available online at http://www.cbo.gov/ftpdocs/110xx/doc11044/02–23-ARRA.pdf.

194 “jobless stimulus” “Did the Stimulus Create Jobs? Yes, the stimulus legislation increased employment, despite false Republican claims to the contrary.” FactCheck.org, September 27, 2010. Available online at http://www.factcheck.org/2010/09/did-the-stimulus-create-jobs/.

194 “zero jobs” PolitiFact, “Rick Perry Says the 2009 stimulus ‘created zero jobs,’” September 12, 2011, available online at http://www.PolitiFact.com/truth-o-meter/statements/2011/sep/12/rick-perry/rick-perry-says-2009-stimulus-created-zero-jobs/.

194 a variety of tax cuts Citizens for Tax Justice statement, “President Obama Cut Taxes for 98 % of Working Families in 2009,” April 13, 2010. Available online at http://ctj.org/pdf/truthaboutobamataxcuts.pdf.

194 64 percent of Tea Partiers New York Times/CBS Poll of Tea Party Supporters, April 5–12, 2010. Available online at http://documents.nytimes.com/new-york-timescbs-news-poll-national-survey-of-tea-party-supporters.

195 “a majority of Americans have seen reduced taxes under President Obama” PolitiFact, “Barack Obama says he lowered taxes over the past two years,” February 7, 2011. Available online at http://www.PolitiFact.com/truth-o-meter/statements/2011/feb/07/barack-obama/barack-obama-said-he-lowered-taxes-over-past-two-y/.

195 The Heritage Foundation Curtis Dubay, “Obamacare and New Taxes: Destroying Jobs and the Economy,” January 20, 2011. Available online at http://www.heritage.org/research/reports/2011/01/obamacare-and-new-taxes-destroying-jobs-and-the-economy.

195 repeatedly displayed a chart PoliticalCorrection.org, “Rep. Bachmann Blames Deficit on Obama,” January 7, 2011. Available online at http://politicalcorrection.org/factcheck/201101070002. Original transcript of Bachmann’s remarks, on Fox News’s On the Record with Greta van Susteren, is available at http://www.foxnews.com/on-air/on-the-record/transcript/bachmann-president-2012.

196 “the most monumental insanity” Andrew Leonard, “It is the most monumental insanity” (interview with Bruce Bartlett), Salon.com, January 5, 2011. Available online at http://www.salon.com/2011/01/05/bruce_bartlett_on_tea_party_monumental_insanity/.

196 warning about precisely this disaster Bruce Bartlett, “Debt Default: It Can Happen Here,” The Fiscal Times, June 11, 2010. Available online at http://www.thefiscaltimes.com/Columns/2010/06/11/Debt-Default-It-Can-Happen-Here.aspx.

196 “the starvation of this economy-retarding beast” John Tamny, “Learn to Love a U.S. Default,” Forbes, May 24, 2010. Available online at http://www.forbes.com/2010/05/22/default-united-states-economy-opinions-columnists-john-tamny.html.

196 debt ceiling denial Carrie Budoff Brown, “Default deniers: The new skeptics,” Politico, May 17, 2011. Available online at http://dyn.politico.com/printstory.cfm?uuid=11733D6E-25F4–410E-9092–45FD717A8B2F.

197 “default will be painful, but it is all but inevitable” Ron Paul, “Default Now, or Suffer a More Expensive Crisis Later,” Bloomberg, July 22, 2011. Available online at http://www.bloomberg.com/news/2011–07–22/default-now-or-suffer-a-more-expensive-crisis-later-ron-paul.html.

197 “starve the beast” approach John Tamny, “Learn to Love a U.S. Default,” Forbes, May 24, 2010. Available online at http://www.forbes.com/2010/05/22/default-united-states-economy-opinions-columnists-john-tamny.html.

198 Reasonably foreseeable consequences Secretary Timothy Geithner, Letter to the Honorable Senator Michael Bennet, May 13, 2011, available online at http://www.treasury.gov/connect/blog/Documents/20110513%20Bennet%20Letter.pdf.

198 Pat Toomey Pat Toomey, “How to Freeze the Debt Ceiling Without Risking Default,” The Wall Street Journal, January 19, 2011.

198 “a complete mystery” Bruce Bartlett, “Debt Ceiling May Come Crashing Down on Treasury,” The Fiscal Times, May 6, 2011. Available online at http://www.thefiscaltimes.com/Columns/2011/05/06/Debt-Ceiling-May-Come-Crashing-Down-on-Treasury.aspx.

198 just the month of August 2011 Bipartisan Policy Center, Debt Limit Analysis, July 2011. Available online at http://www.bipartisanpolicy.org/sites/default/files/Debt%20Ceiling%20Analysis%20FINAL%20(updated).pdf.

199 “default by another name” Treasury Department Fact Sheet, “Debt Limit: Myth v. Fact,” available online at http://www.treasury.gov/initiatives/Documents/Debt%20Limit%20Myth%20v%20Fact%20FINAL.pdf.

199 “shouldn’t be playing around with inflation” Noam Scheiber, “Fighting the Fed,” The New Republic, November 17, 2010. Available online at http://www.tnr.com/print/article/politics/79223/fed-sarah-palin-war-quantitative-easing.

199 not raising any alarm bells Paul Krugman, “A Quick Note on Inflation,” September 24, 2011, available online at http://krugman.blogs.nytimes.com/2011/09/24/a-quick-note-on-inflation/.

199 sent Bernanke a letter Republicans’ Letter to Bernanke Questioning More Fed Action, September 20, 2011. Available online at http://blogs.wsj.com/economics/2011/09/20/full-text-republicans-letter-to-bernanke-questioning-more-fed-action/.

200 “I’m not shocked by much anymore” David Frum, “The GOP’s Bernanke Letter,” FrumForum.com, September 21, 2011. Available online at http://www.frumforum.com/the-gops-bernanke-letter.