The GOP's bizarro economics

With the economy finally, plainly on the mend, the Republican response — perhaps predictable from the party of death panels — is to deploy a bodyguard of lies* about both the causes of the crash and the reasons for the recovery.

Up in New Hampshire last weekend, the latest reincarnation of Mitt Romney purloined the rhetoric of Ronald Reagan — is there anything authentic left about Mitt? — to denounce "the Obama Misery Index." He blamed the president for "soaring numbers of Americans enduring unemployment, foreclosures, and bankruptcies." Right index, wrong president. What about that guy George W. Bush, who left behind a spiraling downturn graver than anything since the Great Depression? Romney uttered nary a word about him, obviously calculating that Republican primary voters will buy Obama-bashing in any form. Romney apparently hopes to then persuade some, just enough, of the mainstream electorate of this ahistorical, economically senseless, and intellectually bankrupt anti-fairytale by repeating it over and over again.

For 2012, Romney has set out to run the way he should have last time — as an economic Mr. Fix-It. He staked his claim in New Hampshire: "I know how jobs are created and I know how jobs are lost." The latter is surely true: Romney's business minted money by buying up companies, firing workers, and revoking their health benefits. But there's a larger problem here, and smart Republicans know it. By the time we get to the next election, Romney's argument will be irrelevant if it's morning in America again.

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Republicans seem to expect or fear a continuing and convincing rebound in jobs and growth; they worry the president will get the credit. So they're deploying their bodyguard of lies on a wider front than Romney's incredible and inevitably time-limited attempt to blame Obama for the Bush disaster.

GOP leaders and strategists now contend that rising job creation is a result of the December agreement to extend the Bush tax cuts. Never mind that they adamantly opposed the $800 billion stimulus, which saved millions of jobs and staved off a depression. Never mind that Obama was always in favor of renewing the tax breaks for the middle class, which will have a far greater impact on the economy because they will be spent more than the giveaways at the top, which will largely be saved. Never mind that to secure their coveted windfall for the wealthy, Republicans agreed to a host of measures — from extending unemployment compensation, which they had previously and coldly disdained, to a one-year payroll-tax reduction — that will act as a second stimulus package.

The Republicans have moved on from a Laffer Curve scribbled on a cocktail napkin to the economics of the time machine. And putting aside the Jon Kyl hallucination that business and markets knew the unknowable in advance, the party line now inclines to a rationalization as old and even older than the anti-New Deal argument of the 1930s. Confidence, we're told, is the key; the midterm elections revived it, and whatever good happens from here through 2012 reflects the better feelings of businesses and investors now that the GOP is partially in charge.

But businesses aren't in the business of deluding themselves into hiring and investing unless there's a rising demand for their products and services. That's what the president's policies have brought — more slowly than Obama wanted, but the most he could pass in the midst of a recession far worse than we knew. Consumer confidence is critical, but consumers need money as well as confidence.

And the confidence argument as applied to business, in the absence or decline of demand, is a con game to justify the ideology of retrenchment. Conservatives here simply refuse to deal with the test case of their theory as put into practice by Conservatives in Britain. They came into office last summer as the British economy was growing again. For the sake of restoring confidence, they announced, they had to cut the budget fast and deep. By the fourth quarter of last year the country had fallen back into negative growth. The British Chambers of Commerce has revised 2011 growth estimates downward and predicts unemployment rising toward its record peak in the early 1990s — just coincidentally, the last time the Conservatives were in charge.

In Washington, Republicans in Congress are rushing down the same ideologically rutted road. "Cutting spending will in fact help create jobs," said Speaker John Boehner on Fox, the happy home site of the GOP's bodyguard of lies. And this one is a lie; the fact is entirely different, indeed exactly opposite. The Republican budget plan pushed through the House could cut economic growth by 2 percent this year and cost 700,000 jobs through 2012. These aren't the estimates of wild-eyed liberals; they come from Goldman Sachs and Moody's analyst Mark Zandi, who advised the McCain presidential campaign. Confronted with the prospect of lost jobs, Boehner spoke his true colors: "So be it."

His party's posturing is designed to have it both ways: find some way to take credit if prosperity takes hold — or find a way to make sure it doesn't. We can be certain that should the Republicans' draconian budget cuts prevail over the president's balanced deficit reduction over time, the GOP won't be boasting that they're responsible if the economy goes back into the tank. Instead they'll echo Romney even if they don't nominate him and criticize Obama for the misery they themselves have created.

That's probably their only chance, assuming they can recruit a candidate stronger than their present field of losers. If Americans see and feel a recovery underway, they will reward the president and the party that did the heavy lifting, not those who try to lift the credit. The GOP's bodyguard of lies will then be dismissed in defeat to the place they belong — the political and economic precincts of Bizarro World, where they famously turn up the air conditioning in order to get warm.

*Winston Churchill is said to have told Joseph Stalin in 1943 that "truth is so precious that she should always be attended by a bodyguard of lies."