GOP and Obama's jobs plan: Do Republicans oppose the president's economic policies for ideological reasons or political ones?

The thinking behind the news.
Sept. 9 2011 6:29 PM

Republicans vs. Economics

Does the GOP oppose Obama's jobs plan for ideological reasons or political ones?

House Majority Leader Rep. Eric Cantor talks with reporters in his office at the U.S. Capital. Click image to expand.
House Majority Leader Rep. Eric Cantor

You can't stop President Obama from reaching out to Republicans; it's what he does. In Thursday night's speech, he tried two separate maneuvers—reminding them of their support for stimulus measures in the past and accepting the good faith of their opposition. "Now, I realize that some of you have a different theory on how to grow the economy," he said. "Some of you sincerely believe that the only solution to our economic challenges is to simply cut most government spending and eliminate most government regulations."

Jacob  Weisberg Jacob Weisberg

Jacob Weisberg is chairman and editor-in-chief of The Slate Group and author of The Bush Tragedy. Follow him on Twitter.

As a rhetorical tack, this was effective. You could see Republicans squirming uncomfortably at the president's calls for them to behave reasonably and help him get the economy moving. Based on House Speaker John Boehner's mild response, some of them seem likely to support at least some aspects of his $447 billion plan to stimulate the faltering economy. They may accept his corporate and payroll tax breaks, if not his proposed infrastructure spending.

But was what Obama said actually true? Are Republicans, in fact, sincere in their belief that the way to restore economic growth and lower unemployment is to cut spending and regulation? Or are they—as Democrats generally assume—pursuing a cynical strategy of trying to keep the economy as weak as possible into 2012 in hopes of defeating Obama?

There is no question that the current Republican position is eccentric as a matter of economics. Pick up any standard economics textbook, and it will explain how governments respond to cyclical downturns with temporary deficit spending. In Keynesian terms, boosting aggregate demand increases GDP growth and reduces unemployment. Conversely, cutting government spending during a slowdown tends to make matters worse. There may be circumstances in which temporary spending isn't possible, or where cutting government spending does not have the typical contractionary effect. But a thorough IMF study conducted last year concluded that "fiscal consolidation" does tend to have the predictable impact: shrinking GDP and raising unemployment.

This is received wisdom among economists, including many conservative ones. Mark Zandi, the Moody's chief economist who was John McCain's economic adviser, judged that the Obama stimulus passed in 2009 kept unemployment from rising two percentage points higher. He says that the president's new proposal would boost GDP by 2 percent and reduce unemployment by 1.9 million jobs. Economists argue about the multiplier effect of different forms of government expenditure but not about whether there is an effect. The only people who claim that stimulus doesn't stimulate the economy are Republican politicians.

You can group the conservatives who reject the economic consensus into three rough categories: fundamentalists, cynics, and sheep. The fundamentalists are ideological and come in several varieties. The more primitive prefer Hoover to Keynes, or in some cases God to Hoover. Rick Perry, the Texas governor and presidential candidate, believes that the purpose of the economic crisis is to bring us back to "Biblical principles." Asked on the campaign trail how he would create jobs if he were in office, Perry responded: "You won't have stimulus programs under a Perry presidency. You won't spend all the money." This is a pretty good summation of the Tea Party's know-nothing view that all government spending makes all things worse, always.

That's not to say that everyone who rejects Obama's stimulus spending is a default-welcoming ignoramus. Libertarians or libertarian-leaners don't necessarily think stimulus won't grow the economy; they just worry that it will grow the government at the same time and that it won't ever shrink back. But they don't mind stimulus tax cuts, which reduce the resources available to government. Rep. Paul Ryan, for instance, the government-slashing chairman of the House budget committee, has argued that stimulus spending is an evanescent sugar high that produces no lasting economic benefit.

The cynics, by contrast, don't offer any economic analysis at all. They simply reject whatever President Obama proposes. In the now immortal words of Senate Minority Leader Mitch McConnell: "The single most important thing we want to achieve is for President Obama to be a one-term president." McConnell, like Boehner and House Majority Leader Eric Cantor, happily voted for the stimulus bill George W. Bush proposed in 2008, which cost $152 billion. Back then, they felt some responsibility for the economy. Now it's Obama's problem. Mitt Romney knows enough about finance to understand that shrinking spending would raise unemployment. But he also knows that running against Obama with a 9 percent unemployment rate is a better bet than running against Obama with an 8 percent unemployment rate.     

In reality, the economic views of most Republicans are not driven purely by ideology or politics, but by the herd imperative—to stay in line and obey their leaders. Of those who were in Congress in 2008, 85 percent voted in favor of the Bush stimulus bill, which was smaller but no different in principle. To assume that these people have a view about whether Obama's jobs plan would work gives them far too much credit. The only jobs they think about are their own.

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