Opinion – Paul Krugman: Why zombie ‘Reaganomics’ still dominates the Republican Party

What is my plan for the next two years? I will be happy, healthy and successful. What am I going to do to get these things? What are you, a Marxist?

I have now summarized the essence of the Commitment to America, announced by Republican lawmakers last week. This “plan” is obviously intended to evoke Newt Gingrich’s 1994 Contract with America, which was followed by a Republican takeover of Congress.

But the Contract with America, love it or hate it – I’m in the second category – offered a very specific political agenda, with a list of planned laws. What Republicans have just released, by comparison, is mostly a list of good things they say will happen, with just a hint of how they propose to make them happen.

If you look closely at the economics section of the Commitment to America, however, you can see the faint outlines of a familiar set of ideas – the zombie ‘Reaganomics’ (referring to former President Ronald Reagan’s economic policies). Which begs a question: Why is deregulation, benefit cuts and tax breaks for the wealthy still the dominant ideology of a party that now claims to defend the working class?

Before I get there, a few notes on what the economics part of the commitment actually says.

First, it’s staggering how many economic complaints are about things that are barely affected by government policy, like the price of gas (which has dropped sharply since its peak) and supply chain disruptions (which have been decreasing).

Second, immediately after declaring that “we have a plan to fix the economy,” Republican lawmakers say they will “reduce unnecessary government spending.” As anyone who follows the budget debates knows, this is the ultimate deception. What expenses are we talking about specifically?

Keep in mind that the federal government is basically an insurance company with an army: most spending is on health, retirement, and the military. You can’t significantly cut expenses without attacking at least one of them. So what parts of these spending are wasteful?

Well, Senator Rick Scott, chairman of the Republican National Committee in the Senate, is calling for the closure of all federal programs — including Social Security and Medicare — every five years, which would open the door to destroying the Americans’ social safety net. United States. Other Republicans have tried to distance themselves from this idea, though without removing Scott from office. But then again, what is this waste of spending that they set out to cut?

But let’s get back to the compromise. Its economic program, as it stands today, calls for “pro-growth taxes and deregulatory policies.” No details, but this is clearly a call to zombie Reaganomics.

Why “zombie”? Because we now have four decades of experience showing that deregulation and tax cuts for the rich do not, in fact, produce higher wages and faster economic growth. So the idea that tax cuts are the secret to prosperity should be dead, but somehow it continues to drag on, eating Republican brains.

Of course, I’m only saying this because I’m a Marxist. (I’m not, but that’s what modern Republicans call anyone who supports progressive taxes and social security.) But financial markets share my skepticism, if that matters. Look at what’s happening in Britain, where Prime Minister Liz Truss’s recent announcement of a Reaganist economic plan sent interest rates soaring and the pound plummeting.

Which brings me back to my original question: why is the GOP still committed to a failed economic ideology?

For a long time, the party seemed to fit the famous portrait drawn by Thomas Frank in his book “What’s the Matter With Kansas?” [Qual é o problema do Kansas?] That is, it was a party primarily dedicated to making the rich richer that managed to win elections on social issues – which in practice meant catering to prejudice during the campaign and, immediately afterwards, turning to tax and benefit cuts.

With the rise of “Make America Great Again” [Faça a América Grande de Novo, na sigla em inglês], however, catering to bias is no longer a marketing device; is the main agenda of the party. In that case, though, why continue with pro-plutocrat policies? Why not add some real populism to the mix? Why did Representative Kevin McCarthy, who is likely to become president if Republicans seize the House, declare that his first bill would be to revoke additional funds for the IRS, allowing wealthy tax evaders to breathe easy?

Part of the answer may be that anti-abortion, anti-LGBTQIA+, anti-immigrant fighters don’t know or care much about economic policy, so they’ve left it to the usual suspects — congressional officials, conservative thinkers and other apparatchiks who have passed. their entire careers promoting the tax-cut mystique.

But there can also be a strategy here. Billionaires can no longer run the Republican Party like they used to, but the party still wants their money. So plutocrat-friendly policies can be a way to keep wealthy donors and corporations on board, even if many of them are uncomfortable with the right-wing social agenda.

This strategy depends, however, on working-class voters not realizing what the Republicans are doing. Hence the empty nature of the Commitment to America; any admission of what the GOP can actually do could be a major political problem.

Translated by Luiz Roberto M. Gonçalves