Fairy Tales Won’t Fix the Economy

By Kevin D. Williamson

Tuesday, April 19, 2022

 

When your party controls the presidency and Congress but produces disappointing results, that ought to tell you something about your political assumptions.

 

Joe Biden, like many (probably most) Democrats, often speaks about the economy in moralistic terms. Like most politicians, he is more likely to speak about it in moralistic terms when he and his party are out of power than when they are in power, for reasons that should be obvious enough. When the other guys are in charge, the indictment reads: “We know what policies will bring about economic growth, higher wages and employment, and more economic opportunity for those most in need of it, but those rat bastards won’t enact those policies, because they are bad people and don’t care about people like you.” This is silly to the point of stupidity, but it is the dominant theme of popular economic-policy discourse.

 

To believe that it is true would require believing that politicians are too committed to some principle to act in their own self-interest, a claim that brings with it a very heavy burden of proof. In reality, the president and the party in power always want to see strong economic growth, low unemployment, and high wages — and, though we didn’t talk about it very much for a generation or so, no president wants to see high inflation on his watch. If there were some magical policy sweet spot that would provide all of the economic results we want in a predictable, consistent way, craven political self-interest — a force more powerful than gravity — alone would ensure that these policies were the No. 1 item on everybody’s list. There would never be a recession, or a financial crisis, or runaway inflation. President Biden is not an especially smart, honest, or decent human being, but he doesn’t want to see food and fuel prices going supersonic during his presidency. The fact is that nobody really knows how to deal with the inflation problem without inviting a whole raft of other economic problems. The economy is complex — it isn’t a LEGO set that will all come together the right way if we just follow the instructions.

 

None of this is to say that government policy cannot in any instance have a big and immediate effect on the economy. Our current inflation problem is, in part, proof that it can. But even that is more complicated than the political conversation will account for. The Biden administration is wrong — and dishonest, and cowardly — to pretend that our inflation problem is the result of Vladimir Putin’s invasion of Ukraine. Everybody knows this — even Biden’s media allies sometimes are shamed into admitting that the problem precedes the war in Ukraine. But the war in Ukraine probably is intensifying certain aspects of existing inflation (more so abroad than in the United States), just as misgovernance in China is exacerbating supply-chain problems, as are factors ranging from managerial incompetence in California to century-old merchant-marine regulations in the United States. President Biden of course invited blame on himself by spending all of his campaign and much of his career talking about the president as a supernatural figure who could will prosperity into existence if only he had the right moral character.

 

The Democrats have controlled the White House and Congress since the end of the Donald Trump administration, and they’ve controlled the House since 2018. What have the Biden administration and its congressional allies delivered for Democrats while enjoying that power? Not very much, really. More than conservatives would have liked, to be sure, but all of that talk about New New Deals is dust in the wind, smoke on the water, the rock-’n’-roll cliché of your choice. And while Republicans shouldn’t get too cocky about the next election, it is likely that Biden will not have a Democrat-controlled House and Senate come January. It probably is the case that Democrats already have got what they’re going to get out of the Biden years.

 

Republicans should be intimately familiar with what that feels like, because it is what happened to them in the first two years of the Trump administration, when the GOP controlled the White House and Congress both. What did the Republicans get out of the great populist revolution of 2016? Paul Ryan’s tax bill, which might as well have been written by the Chamber of Commerce (and in some parts may well have been). Trump talked a great deal about immigration, but he and his congressional allies never even took up an immigration bill when they controlled the executive and legislative branches. The die-hard Trump cultists on talk radio and Fox News insist that we at least enjoyed “energy independence” in those years, but that is a plain and simple lie: The United States has not been “energy independent” at any point in its modern history, very likely never will be, absolutely shouldn’t be, and, if we’re keeping score here, imports a bit less oil today than it did in 2018.

 

Democrats and Republicans both engage in predictable blame-shifting when things go wrong on their watch, although in the Trump years the White House was as likely to try to shift blame onto other Republicans as onto Democrats. Writing in the New York Times this week, Senator Elizabeth Warren (D., Harvard Yard) blames “Republican senators” for the lack of beneficial policy innovations. The Trump administration blamed Democrats and the “establishment” and the “deep state” and, I don’t know, those mean aliens from Independence Day for its policy woes. If your argument is: “The good society and national prosperity require that people like me have all the political power and that the people I hate have no power to oppose us” . . . are you still talking about economic policy?

 

No, that’s just dumb old culture-war stuff.

 

By almost any meaningful measure, you won’t see radical changes in U.S. economic performance as a result of a change in which party holds the presidency or controls Congress. For all of the moralistic talk and preening homiletics, the things that strongly and immediately affect our economy are mostly outside of the control of politicians. The Trump administration saw both a radical collapse in the U.S. economy and a dramatic recovery — each driven by Covid-19, with government policy playing a mostly secondary role. George W. Bush wore the blame for the subprime meltdown, which had almost nothing to do with the actions of his administration and was rooted in policy decisions going all the way back to the 1930s. Bill Gates and Marc Andreessen had a lot more to do with the economic boom of the 1990s than Bill Clinton did. Et cetera ad nauseam.

 

We have real problems, and we are not going to make things better by means of empty-headed moralistic fairy tales. We are going to learn that lesson, eventually — and probably learn it the hard way.