Shall We Dance?

At Tapped, Mark Schmitt is entertaining himself by making fun of the newly-released Third Way strategy paper, "The New Rules Economy." Lots of really competent people have already weighed in on this, so I’m not really going to say all that much about the substance of the thing except to note that I more or less agree with Schmitt about the actual policy proposals it contains. It’s hard to see any real reason to get behind, say, tax deductions for college tuition; it’s a program for redistributing funds from the upper middle class to the lower middle class, nothing more. Well, nothing more unless you realize the significant extent to which “lower middle class” and “swing voter in Ohio” overlap.

Besides, I’m not really a policy guy, anyway. I’m a theorist, so the parts of the paper that I find interesting aren’t so much the policy parts. No, what I find far more interesting is the extent to which the opening sections of the paper extend an olive branch to libertarians. Yes, I know that the Democratic Party has its fair share of shrill leftists. To be fair, though, the Republican Party, where many libertarians have found their home since the days of Goldwater and Reagan, has its fair share of theocratic warmongers. Neither party has a lock on insanity. That leaves libertarians with a few options.

    A. Side with Republicans for their stance on fiscal matters and hold our nose and try to ignore the religion-based social nuttiness.
    B. Side with Democrats for their stance on social matters and hold our nose and try to ignore the neopopulism.
    C. Reject both major parties and vote for the Libertarian Party.
    D. Bail on politics entirely and wait for the revolution.

Option D doesn’t strike me as all that useful. Nor is it really what Catallarchy is all about. If you want libertarian purity, try over here. For those of us who live in the actual world, putting our heads in the sand and waiting for Libertopia to just happen is a poor strategy.

Option C, however, doesn't really seem all that much better, largely because it is, in effect, extensionally equivalent to D. Sure you can talk about breaking the hegemony of the two-party system all you want, but as much as I hate to be the one who has to tell you this, it ain’t gonna happen in our lifetime, folks. The two-party system has survived assaults from all sorts of challengers. Exactly one a third-party candidate has won a Presidential election, and that election was followed by a messy civil war. Indeed, calling the Republican Party a third party isn’t entirely even accurate since, in reality, is was more a realignment of the two existing parties combined with a name change. Teddy Roosevelt couldn’t manage a third-party coup; anyone really think that Harry Browne is going to be more successful?

To the extent that libertarians really want to affect political change, then, there are but two realistic options. Choose A, side with Republicans and work on softening the social conservatism or choose B, side with Democrats and work on softening the neopopulism. The question, then, is whether A or B represents the most promising strategy. Now there was obviously a time when A made the most sense. During the Goldwater era, for example, Republicans really did espouse libertarian economic policies. But Ronald Reagan’s strategic decision to court religious conservatives, while successful in securing his election, ultimately proved the beginning of the end for libertarian Republicans. George W. Bush has pretty well finished them off, consistently making the Republican Party less like the Libertarian Party and more like a European-style Christian Democracy Party. The three main contenders for the Republican nomination in ’08 – McCain, Romney and Giuliani – aren’t doing much better so far. McCain and Romney are currently spending almost all of their time trying to convince evangelical Christians of their piety. Hence we have Romney espousing religious requirements for the Presidency and McCain denouncing Roe v. Wade. Only Giuliani seems to be holding true to some sort of libertarianism, and if the Republican base actually nominates him, I’ll (gasp) seriously consider supporting him. I rather suspect that I won’t have to, though. In fact, I wouldn’t be all that surprised to see Sam Brownback getting the nod from the GOP.

So if the Republicans aren’t exactly reaching out to libertarians on social issues these days, is an alliance with Democrats really a possibility? If one equates “Democrat” with “Daily Kos activist” then the answer is no. But for all their noisiness, the netroots is actually a pretty small percentage of the Democratic Party. Fortunately, there is a subset of the Democratic Party for grown-ups. A place for people with a basic grasp of economics, an understanding of the complexity of international relations, and an awareness that radical changes are both dangerous and politically infeasible. I’m talking, of course, about the DLC, the group that implemented the third way to some success during the Clinton presidency. Which brings us back to the initial point of the post.

“The New Rules Economy” is, of course, aimed at other Democrats. But quite interestingly, it makes many of the same points that I’ve been reading here at Catallarchy for quite some time. Consider the report’s deconstruction of the three Myths of Neopopulism:

    1. The myth of the failing middle class. The authors note that (a) income has increased significantly for those in their prime working years, (b) increased middle-class debt is largely due to increased mortgages as more an more of the middle-class invest in bigger and better homes, (c) income is less volatile than it once was, and (d) contra the neopopulists, Americans are actually pretty optimistic about the state of the economy.
    2. The myth of a declining America. Although the neopopulists would have us believe that America is on the decline, it turns out that (a) the impact of trade on American jobs is actually pretty minimal (one million jobs have been lost to overseas trade – as compared to the 401 million Americans who quit various jobs and the 423 million who started new jobs over the same period), and (b) the decline in savings rate among Americans fails to include things like home equity, investments in a college education, and investments in research and development.
    3. The myth of corporate omnipotence. While reports of record corporate profits and runaway executive pay dominate headlines, those reports are pretty frequently taken out of context. So (a) while corporate profits may be at record highs in 2006, it’s worth noting that they were at near record lows in 2001. It’s called a business cycle. And (b) even if we took the total earnings of the top 2500 executives in America and redistributed that to all workers, it would amount to around $100 each. That’s dinner and wine for two at Harry and Jean's with just about enough left for a movie and popcorn. Nice, but not world-shaking.

Obviously my gloss is fairly quick. And certainly there's still a lot to quarrel with, particularly for those whose intuitions are more libertarian than mine. You should go read the whole report. It's hardly the sort of document we'll all want to sign on to, but as an opening gesture, it's really not that bad. Indeed, if we want our ideas to be taken seriously, then we have to make them part of the mainstream. Catallarchy is a good start. And I hear that there's this Cowen guy out there who has a few readers, so that'll help some, too. Still, blog readers represent a pretty small fraction of the voting public (which in turn is a small fraction of the voting-eligible public, but that’s another issue for another post). We need a bigger pulpit. A Democratic Party that combines social liberalism with a new commitment to respecting markets presents could give us a really big pulpit.

So here's the deal. We’ve just been invited to the big dance. We can say yes. Or we can sit at home telling ourselves that if we just wait long enough the perfect partner will call.

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