We Built This Economy

Moneybox
A blog about business and economics.
Aug. 29 2012 8:30 AM

We Built This Economy (On Regressive Tax Cuts)

New Jersey Gov. Chris Christie speaks at the Tampa Bay Times Forum in Tampa, Fla., on Aug. 28, 2012, during the Republican National Convention
New Jersey Gov. Chris Christie speaks at the Tampa Bay Times Forum in Tampa, Fla., on Aug. 28, 2012, during the Republican National Convention

Photograph by Stan Honda/AFP/Getty Images.

I covered the last two Republican Conventions live in St. Paul, Minn., and New York and consequently didn't actually spend that much time watching the speeches. Last night, in the comfort of my living room watching PBS, I got a better sense of exactly how tedious it is to watch person after person saying basically the same thing. But it also reminds you of the fundamental value of conventions—they cut through the veil of "news" and remind nonjunkies of the enduring disagreements between the parties that, at root, all elections are about.

Only once you see it in that light do last night's activities make sense.

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Otherwise, on the surface, the theme of the evening was dedicated to attacking Barack Obama for something he never said. If your main critique of the Obama administration is that you're worried he thinks that business owners didn't build their own businesses, then I've got good news for you—he doesn't think that and he never said it. What he said is that no man is an island, and every American success story builds on the larger legacy of American public infrastructure and public education, the American legal system, and the men and women who uphold the law and defend the country.

But the reason it's OK to dedicate a night to something Obama didn't say is that conventions aren't about the news. They're about the enduring values. And what's quite true is this—one party thinks that we make the average American better-off by making public policy more friendly to the most economically successful Americans and the other party thinks we make the average American better-off by making public policy less friendly to the most economically successful Americans. And that's what last night was all about. And the Obama speech in question actually is a pretty good example of the theme. The Republican argument is more or less that it's unseemly to be poking around under the hood of various success stories looking for excuses to raise taxes. We should be celebrating success and congratulating the Job Creators on their prowess, not worrying about exactly how much money we can soak them for. Although this does leave you with Obama's original point. It's just not plausible that America is so much richer than India because no smart, hard-working entrepreneurs were ever born in India. It's America's public framework that makes all the difference. We spent the 19th and 20th centuries as the best-educated country on earth and we're still close to the top. The American government has built canals and intercontinental railroads and highways and the Internet.

The counterpoint I would have liked to see the GOP raise to this is that while it's true this kind of thing is important, if you crack open the books you'll see that this isn't really what the federal government spends money on. The federal government's big programs are the military, income support for the elderly, health care for the elderly, and health care for the poor and disabled. When the 111th Congress had the chance to pass some big government laws, their big agenda item was to increase the provision of health care subsidies to lower-income Americans, not to drastically increase public investment. But that argument isn't available to them because much as people might worry that the social insurance state is crowding out investment, the Romney/Ryan budget framework cuts federal investment spending even more aggressively than it rolls back social insurance.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.