The final defeat of the reformocons
Will no one defend the Republican Party against goldbuggery?
After their 2012 election loss, sharper Republicans admitted that their party was in need of some fresh ideas, or at least a fresh coat of paint. Thus was born the "reformocon" movement, a much ballyhooed (partly by myself, admittedly) movement for GOP change.
Their recommendations went along three major lines. First, with the party increasingly massacred among Latinos, they argued that immigration reform was necessary. Second, they argued the party needed a more middle class-friendly policy portfolio. Third, they argued for the value of stimulative monetary policy during times of economic weakness.
The recent GOP debate provided a chance to see whether these ideas have had any serious traction. Have they?
Nope — on the contrary, things appear to be backsliding. I checked up on the reformocons in March, and found that their ideas had been basically cast aside. Now, most of them have been stamped into the dirt, soaked in kerosene, and set ablaze.
On immigration, Republicans have moved from pretending as though immigration reform never passed the Senate, to frontrunner Donald Trump loudly defending his plan to deport 11 million people by favorably comparing it to President Eisenhower's "Operation Wetback" from 1954. I'm not kidding: It was actually called that. A recent poll found that over 40 percent of Latinos now view the GOP negatively, and less than a quarter at all positively.
On middle-class policy, all the candidates have proposed truly awesome tax cuts for the rich. Jeb Bush would give the average one percenter $177,246 per year, Marco Rubio would give him $223,783, and Trump would give him $227,225. About the only sort of middle-class policy that survives is Rubio's child tax credit. This thing changes by the hour, with Rubio insisting one minute that it's fully refundable (thus making it quite expensive, but powerfully beneficial to the poor) and contradicting himself the next, by insisting it's not refundable (and would thus exclude the poor).
But let's be realistic here. A Republican Congress passing a giant new anti-poverty benefit is about as likely as Ben Carson being able to give a coherent explanation of radiometric dating. If I had to guess, I'd bet the whole thing would be forgotten by a President Rubio after massive pressure from the donor class.
That brings me to monetary policy, focus of the reformocons' biggest argumentative effort back in 2013 — and now their biggest failure.
Conservatives, due to automatic suspicion of any government action outside of enforcing property rights and contracts, have long disliked central banks. Monetary policy cannot happen without a competent government bureaucracy, which is a priori impossible according to St. Reagan. There is a deep tendency to find some kind of replacement for government-operated monetary policy through an automatic mechanism like the gold standard (which still requires a ton of government action, but never mind). This is why reformocons' arguments defending the Federal Reserve were so potentially valuable.
But Ted Cruz went full goldbug during the last debate, and nobody challenged him on it. He claimed that the U.S. had a singular gold standard for 170 years, and growth and inflation were consistently better than they are today. Now, as my colleague Jeff Spross explains, this is garbage history and economics — the gold standards (there were several very different versions) were far more chaotic and complicated than Cruz claims, and more importantly, would be an utter disaster today.
But none of Cruz's primary competitors pointed this out or stood up for mainstream monetary policy. On the contrary, they all nodded and declaimed that the Federal Reserve was somehow harming the American citizenry. Though their arguments were false, ill-informed, or internally inconsistent, that doesn't make the prospect of a Republican presidency any less nerve-racking. Eighty-six years after the 1929 crash, Republicans can't quit Andrew Mellon.
And except for the dubiously-conservative Megan McArdle, none of the reformocons even mentioned Cruz's gold standard thing. (Though Jim Pethokoukis did mildly criticize him for it some days before, to be fair.)
Meanwhile, the Fed is poised to make a major policy mistake next month, when most observers predict that they will raise interest rates for the first time since the 2008 crisis. With inflation below target, wage growth minuscule, employment still not very strong, and economic conditions troubled around the world, it's a far too premature move that risks strangling job growth, if not tipping the nation back into recession. Hard money cranks pushing from the right — with little pushback from ostensible reformers — is a big reason why.