The Bond Market and Expectations: A Parthian Shot

Live from Cleveland: Norm Ornstein and Tom Mann are '90ers--they believe that the roots of Republican Party dysfunction and the current danger to our Republic began in 1990 when Newt Gingrich persuaded Republican office holders in Washington that breaking as much of the government as they could and delegitimizing the rest was the right road to power and influence. Paul Krugman is an '80er--he believes that the roots lie in 1980, with the Reagan campaign's capture by those whom Greg Mankiw used to call "charlatans and cranks" and the adoption of "Voodoo Economics". (There are also '64ers, like Rick Perlstein, who say: "Goldwater".) I tend to be a 90er myself...

Paul Krugman: The GOP's Original Sin - The New York Times: "Norm Ornstein... the GOP... off the rails... a radical party... little regard for truth...

...He’s right, of course; I’ve been saying much the same thing since the early 2000s, notably in the introduction to my book The Great Unraveling. My reward, by the way, was to be labeled ‘shrill’; and at the risk--actually not the risk, the certainty--of sounding whiny, I’m still generally treated as having overstepped the boundaries even though everything I said back then is now becoming more or less conventional wisdom. I guess I was a premature anti-GOPist. In fact, can’t help noticing something about this graf from Norm himself:

We came to our blunt conclusions from perches inside the belly of the beast, observing, analyzing, and interacting with the top political figures in Congress and the executive branch since 1969. Other scholars and journalists, including Jonathan Chait, James Fallows, Jacob Hacker, and Paul Pierson had paved the way with observations and analyses similar to ours.

OK, whining over. What I want to talk about is when, exactly, the GOP went over the edge.... I think the real watershed came in 1980-81, when supply-side economics became the party’s official doctrine.... Supply-side wasn’t a doctrine like monetarism or even real business cycles--ideas I may think are wrong, but which had and to some extent still have significant support from professionals in the field. Supply-side economics never had any evidence behind it; it never had any support in academic research; it barely even had any support among economic researchers and forecasters in the business world. It was and remains crank economics.... Yet 35 years ago the GOP was already willing to embrace this doctrine because it was politically convenient, and could be used to justify tax cuts for the rich, which have always been the priority. And given this, why should anyone be surprised at all the reality denial and trashing of any kind of evidence that followed? You say economics is a pseudo-science? Fine. First they came for the economists; then they came for the climate scientists and the evolutionary biologists. Now comes Trump, and the likes of George Will, climate denier, complain that he isn’t serious. Well, what did you think was going to happen?

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