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Paul Krugman: GOP doubles down on tax cuts for the wealthy

Independent analysis of the tax cuts proposal of Jeb Bush, above, shows that it’s more tilted toward the wealthy than anything done by his brother, formerPresident George W. Bush, writes Paul Krugman.
Independent analysis of the tax cuts proposal of Jeb Bush, above, shows that it’s more tilted toward the wealthy than anything done by his brother, formerPresident George W. Bush, writes Paul Krugman. The Associated Press File

This was the year of Donald Trump, whose rise has inspired horror among establishment Republicans and, let’s face it, glee – call it Trumpenfreude – among many Democrats. But Trumpism has in one way worked to the GOP establishment’s advantage: It has distracted pundits and the press from the hard right turn even conventional Republican candidates have taken, a turn whose radicalism would have seemed implausible not long ago.

After all, you might have expected the debacle of George W. Bush’s presidency – a debacle not just for the nation, but for the Republican Party, which saw Democrats both take the White House and achieve some major parts of their agenda – to inspire some reconsideration of W-type policies. What we’ve seen instead is a doubling down, a determination to take whatever didn’t work from 2001 to 2008 and do it again, in a more extreme form.

Start with the example that’s easiest to quantify: tax cuts.

Big tax cuts tilted toward the wealthy were the Bush administration’s signature domestic policy. They were sold at the time as fiscally responsible, a matter of giving back part of the budget surplus America was running when W took office. (Alan Greenspan infamously argued that tax cuts were needed to avoid paying off federal debt too fast.) Since then, however, over-the-top warnings about the evils of debt and deficits have become a routine part of Republican rhetoric, and even conservatives occasionally admit that soaring inequality is a problem.

Moreover, it’s harder than ever to claim that tax cuts are the key to prosperity. At this point the private sector has added more than twice as many jobs under President Barack Obama as it did over the corresponding period under W, a period that doesn’t include the Great Recession.

You might think, then, that Bush-style tax cuts would be out of favor. In fact, however, establishment candidates like Marco Rubio and Jeb Bush are proposing much bigger tax cuts than W ever did. And independent analysis of Jeb’s proposal shows that it’s even more tilted toward the wealthy than anything his brother did.

What about other economic policies? The Bush administration’s determination to dismantle any restraints on banks – at one staged event, a top official used a chain saw on stacks of regulations – looks remarkably bad in retrospect. But conservatives have bought into the thoroughly debunked narrative that government somehow caused the Great Recession, and all of the Republican candidates have declared their determination to repeal Dodd-Frank, the fairly modest set of regulations imposed after the financial crisis.

The only real move away from W-era economic ideology has been on monetary policy, and it has been a move toward right-wing fantasyland. True, Ted Cruz is alone among the top contenders in calling explicitly for a return to the gold standard – you could say that he wants to Cruzify mankind upon a cross of gold. (Sorry.) But where the Bush administration once endorsed “aggressive monetary policy” to fight recessions, these days hostility toward the Fed’s efforts to help the economy is GOP orthodoxy, even though the right’s warnings about imminent inflation have been wrong again and again.

Why does this matter? Right now conventional wisdom, as captured by the bookies and the betting markets, suggests even or better-than-even odds that Trump or Cruz will be the nominee, in which case everyone will be aware of the candidate’s extremism. But there’s still a substantial chance that the outsiders will falter and someone less obviously out there – probably Rubio – will end up on top.

And if this happens, it will be important to realize that not being Donald Trump doesn’t make someone a moderate, or even halfway reasonable. The truth is that there are no moderates in the Republican primary, and being reasonable appears to be a disqualifying characteristic for anyone seeking the party’s nod.

Paul Krugman is a New York Times columnist.

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