This was originally published in 2013; certain facts and figures may have changed
Stocks are surging today because the economy is still fundamentally sound. No one on Wall St. cares about Cyprus, debt, job loss and stuff like that. Dow 15000 just around the corner. Bitcoin is going to $200 soon. People getting richer than ever through speculation, web 2.0, housing market.
Since around 2008/2009 the GOP has been infected with a pervasive strain of pessimism or what I call ‘small government liberalism’. This is a GOP that eschews its pro-growth successors of George W. Bush and Reagan for small government, fiscal frugality, financial regulation, and protectionism. These are the conservatives that oppose the drone program and deficit spending while attacking Wall St. and fanning the flames of class warfare for populist votes. The GOP , once the party of boundless optimism- harbingers of a 21st century manifest destiny to spread technology, democracy and free markets to all corners of world has withered into a shell of small government small minded irrational fear; fear of financial instruments, fear of globalization, fear of technology, fear of deficits.
There is a large disaffected electorate that has been hurt by the overblown, media generated financial crisis (exacerbated by the New York Times to get Obama elected) and stock market plunge, but that doesn’t mean the GOP has to renounce the policies that worked spectacularly well during strong economic times- mainly pro-growth, free trade, monetarism, and interventionism. The rise of Rand Paul or ‘small government liberalism’ is endemic of this problem. Attacking ‘fat cats’ and the military industrial complex is a cathartic approach that appeals to voters, but the GOP must resist the temptation to co-opt these platitudes that are the mainstay of welfare liberalism.
There is a tendency for this new GOP to spread misinformation about the deficit and the economy. They want America to get its ‘fiscal house’ in order, but is this just another example of making a mountain out of a fiscal molehill? For example, these ‘small goverment liberals’ conveniently ignore the fact that the USA pays less interest on its debt relative to GDP than in the 90’s. Deficits can be used for good and bad; in the case of Paul Krugman and other neo-Keynesians they are used to force equality and job creation, and at a large waste. Conservatives, on the other hand, skillfully used deficits in the 80’s and 2000’s to promote pro-growth policy such as defense spending and tax cuts. See, the problem isn’t the deficit or the size of the government, but how it is used- a subtlety that ‘small government liberals’ fail to grasp. Thanks to ‘big government’ homeland security programs, over fifty homegrown terror plots have been thwarted since 9/11. Conservatives in siding with the UN would rather have the USA abort the war on terror or risk lives of more US troops to kill terrorists How many US citizens have been killed by drones? Exactly one, who happened to be a terrorist mastermind (which I think is grounds for revocation of citizenship). Other conservatives such as Peter Schiff frequently compare America to Greece, ignoring that Greece pays considerably higher interest on its debt than the USA and is an economic weakling with a GDP smaller than Boston.
Deficits, bank bailouts, and drones aren’t the problem; the problem is liberalism and a recessionary woe is me attitude that has permeated the modern conservative movement. We need less Burke, Kirk, Will and Buckley and more Kristol, Krauthammer, Milton Friedman, McCain and dare I say Rush Limbaugh?I implore the GOP to stop the anti-debt, class warfare rhetoric and bring back pro-growth policies.