Obamaconomists

At a convention this weekend, I remarked on how unusual it is these days to find a politically conservative economist ("Yeah," my advisor quipped, "when Milton Friedman died it went down by 50%!"). But it seems like most people can half-recall a time when "economist," in a political setting, meant "intellectual Republican hack." "Mainstream" economic theory was supposed to support "efficiency" at the expense of the welfare of the poor - which meant tax cuts, less government spending, no minimum wage, and no regulation. Some (on both sides) still think that's what economics is all about.

But if that ever was true, it sure isn't now. For one thing, economic theory has progressed far beyond the infantile stage of saying "Well, markets are always perfect, we can go home now." We are well aware of things like externalities, public goods, asymmetric information, sticky prices, non-enforceable contracts, and many other "market failures" that necessitate collective remedies of some sort. These concepts have actually been around for ages, but only in the last couple decades have economists really realized how central they are to how the world works.

So economics has changed, but politics has changed too. Reagan "showed" that it's politically easy to cut taxes but very difficult to cut government spending - hence, the conservative approach to governing tends to lead to massive debt. And Clinton "showed" that balanced budgets and an industrial policy focused on technology and education were better for the economy than the slash-and-burn Gingrich approach.

That's why, in The Economist's poll of professional economists, Obama whups McCain by more than 5 to 1. And though plenty of economists are politically neutral, the others favor the Democratic Party by a 4-to-1 margin. The days of economics as a "conservative discipline" are over.

What will be the Republican response to this seismic shift? I think we have a pretty good guess. They'll start to paint economists as just another bunch of egghead intellectual elites. They'll scoff at the "expert" opinions of out-of-touch academics. They'll pull in pseudo-economist hacks like Donald Luskin and Larry Kudlow to bleat 80s mantras, and claim that these pricks obviously know more than people with economics degrees. And they'll lean ever more heavily on their grassroots base of white-tribalists (who don't give a good goddamn about economics unless it gives them a reason to live far away from black folks). All of this is already happening.

But one day Republicans will start to realize: where economists go, businesspeople follow. Business, unlike political hackery, has a bottom line to think of.