The Republican’s new agenda

Tax cuts!!  You’re shocked, right?  Jon Chait eviscerates Karl Rove’s latest WSJ Op-Ed as only Chait can:

So the Republican growth agenda is to leave all the Bush administration’s policies in place. My favorite twist in the argument is where Rove calls this a “positive agenda” and immediately segues to arguing about all the terrible things that will happen if we restore Clinton-era tax rates. It worked so well under Bush, of course it’s the solution to our problems now! (Also note that the Bush-era tax rates have not yet expired, so they’ve literally been in effect throughout this entire crisis.)

Also in that op-ed, you can watch Rove try to grapple with Keynesian economic theory:

Last Thursday House Speaker Nancy Pelosi joined the president in his bad bet by offering up the economic gem that extension of unemployment benefits “creates jobs faster than almost any other initiative you can name.” Really? Faster than, say, cutting personal income tax cuts or slashing the corporate tax rate?

That’s Rove’s entire rebuttal: “Really?” He thinks it’s self-evidently absurd to claim that extending unemployment benefits would create jobs more quickly than cutting taxes for business or upper-income taxpayers. In fact, the unemployed have a high propensity to consume marginal dollars — they’ve seen a huge loss of income and are trying desperately to pay their bills and maintain some level of consumption. Businesses are sitting on enormous piles of cash.

The superiority of unemployment benefits as stimulus is economic conventional wisdom.

Karl Rove may know how to help Republicans win elections, but when it comes to actually understanding and writing competently about public policy, the man is an absolute buffoon.  It’s a shame that because of his ability in the former so many people take him seriously in the latter.


About Steve Greene
Professor of Political Science at NC State

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