Conservative Economic Nonsense

Jonathan Chait

Why Do Good Conservative Economists Endorse Pseudoeconomic Nonsense?

Former Bush economic advisor Greg Mankiw urges President Obama to stop "spreading the wealth:


Ever since your famous exchange with Joe the Plumber, it has been clear that you believe that the redistribution of income is a crucial function of government. A long philosophical tradition supports your view. It includes John Rawls’s treatise “A Theory of Justice,” which concludes that the main goal of public policy should be to transfer resources to those at the bottom of the economic ladder.

Many Republicans, however, reject this view of the state. From their perspective, it is not the proper role of government to fix the income distribution in an attempt to achieve some utopian vision of fairness. They believe, instead, that in a free society, people make money when they produce goods and services that others value, and that, as a result, what they earn is rightfully theirs.

Like AEI President Arthur Brooks, Mankiw makes a fundamental arror here is assuming that there are two approaches toward income distribution: believing either that the market is perfectly fair and all attempts to mitigate market inequality therefore fundamentally unjust, or believing in total equality. Obama and the Democrats are not pursuing anything even vaguely resembling a "utopian vision of fairness." The tax code is very slightly redistributive:



Democrats propose to make it ever more slightly so. But restoring Clinton-era rates on the rich is not a utopian left-wing plan.

Mankiw's argument serves the useful, if inadvertent, purpose of showing how it is that at least some legitimate economists support the GOP. Republican economic policy is dominated by a debt-financed tax cuts, a policy that has no economic support. (To the extent that conservative economists can back up support for tax cutting, it is for tax cuts matched by spending cuts, which has no relation to actual Republican policy.) Mankiw is an acclaimed economist, and actually wrote a textbook describing those who claim tax cuts can increase revenue as "charlatans and cranks," despite the fact that the president he worked for repeatedly made that very argument.

So why is it that conservative economists like himself can lend their name to Lafferism and other nonsense? They're driven by their political philosophy, not their economic beliefs. Mankiw is willing to overlook the crankery of Republican economics because it furthers his philosophical beliefs. When he advocates Repiublican policies, it is generally Mankiw the amateur political philosopher speaking, not Mankiw the economist.