Democrats Need New Ideas, Not New Think Tanks:
Kevin Hassett
Aug. 22 (Bloomberg) -- When you weigh the things that have led to Republican political domination in recent years, you can't help but be struck by the dearth of innovative ideas coming from the Democrats.
Even Los Angeles Times columnist Michael Kinsley, no fan of the Republicans, has noticed. ``It's true that the Republicans are the party of ideas and the Democrats are the party of reaction,'' he wrote earlier this month. ``Republicans set the agenda, and Democrats try to talk the country out of it.''
With Democrats faltering in the marketplace of ideas and reeling from electoral losses, a group of financiers has initiated a visible and collective movement to recover -- a vast left-wing conspiracy, you might call it. The Washington Post reported on Aug. 7 that at least 80 liberals have pledged to contribute $1 million apiece to fund a new network of think tanks through an organization known as the Democracy Alliance.
Their intent is to revive the intellectual left.
Their endeavor is doomed from the outset.
Taxes and Growth
It's folly to construct a network of research organizations with a clear aim of supporting specific political ends, in this case those of the Democratic Party. Good research provides no political advantage because it convinces everyone.
You shouldn't care who accepts your research. While Republicans in the U.S. may have adopted more ideas emanating from a small set of think tanks, Democrats could have done so as well. What are these new think tanks going to do, keep their research secret from Republicans?
Indeed, it's quite common for ideas from ``right-wing'' think tanks to affect left-wing governments. For example, numerous studies have demonstrated that high corporate tax rates harm economic growth. Countries around the world have responded to this information by cutting tax rates.
They did so because the connection between tax rates and growth was convincing, not because of the political affiliations of the researchers.
All this raises the question: Why have Democrats been less reliant on the policy prescriptions emanating from think tanks that have documented the benefits of free enterprise?
World View
The answer provides another big reason that the Democracy Alliance will fail: Democrats continue to rely on a world view that crumbles under scrutiny.
Sifting through Democratic positions on numerous different policies, you find two core beliefs that differentiate their view of the world from that of Republicans.
First is the belief that redistributing income is the most important objective of government. Second is the belief that high tax rates don't hurt.
These beliefs create two problems for Democrats. The first is that if you assume they're correct you would find the two beliefs lead logically to highly unpopular policies. If equality is so wonderful, one should be willing to increase marginal tax rates in the U.S. on anyone who has an income higher than the median (about $43,000).
Tax increases are indeed recommended by left-wing intellectuals. New York Times columnist Paul Krugman, for example, recently called for the U.S. to raise taxes as a share of gross domestic product from the current 17 percent to 28 percent -- a 65 percent increase. Good luck to the politician who tries to convince voters of that.
Repudiated by Data
The second problem with these beliefs is that they have been repudiated by the data. One might be able to sell big tax boosts if the benefits of a more equal distribution of income were large. Perhaps the Democracy Alliance could support research that sheds light on the positives associated with equality.
It seems unlikely that such research will bear much fruit. The fact is the impact of the distribution of income on the economy has been the subject of hundreds if not thousands of papers. In rich countries, the literature clearly indicates that economic growth is higher in countries that have a bigger gap between rich and poor.
Attempts to redistribute income have harmed everyone over time. That's because high redistributive tax rates have all sorts of negative effects.
To some extent, a natural laboratory exists where ideal Democratic policies have been enacted by a powerful leftist government: France. As economist Donald Luskin emphasized in a recent National Review, the results of these policies have been catastrophic. Since 1991, average real GDP growth in France has been 1.8 percent. In the U.S., it was 3.1 percent.
What Microwave?
Surely, you say, the poor live better in France. Au contraire. ``The average French family has a lower standard of living than Americans living below the poverty level,'' Luskin wrote. ``Impoverished Americans have 16 percent more dwelling space per capita than the average French; the American poor are more likely to have a car, a dishwasher, a microwave oven, a personal computer, and a clothes drier.''
The problem with the left today isn't that they don't have enough think tanks. The problem is they have held on to core beliefs that are incorrect.
They don't need more think tanks to push their ideology. They need a new ideology. |
